graduated income tax

John Cullerton
Brian Mackey/WUIS

With the Illinois General Assembly’s spring session over, lawmakers aren’t scheduled to return to the Capitol until November. Two months of fierce debate over state spending and taxes culminated in a stalemate, so they passed a placeholder budget that will likely have to be revisited at the end of the year.

What they did — and more importantly, what they didn't do — will shape the political conversation heading into this fall’s general election.

This year began with Democrats outlining an ambitious, progressive agenda for Illinois.

ILGA.gov

Illinois will keep its flat income tax, despite an effort to move to a graduated one.

Based on the General Assembly's schedule, the Senate would have had to pass the proposal Tuesday in order to meet a constitutional deadline.

Instead, senators adjourned without a vote.

The measure's sponsor, Senator Don Harmon, D-Oak Park, sticks by the plan.

He says would allow Illinois to be nimble with tax policy.

Host Amanda Vinicky and guests Ray Long (Chicago Tribune) and Nicole Wilson (24/7 News) discuss Gov. Pat Quinn's possible political hiring as well as Madigan's backing of the 5% income tax continuing, not enough votes for increase in minimum wage, possible death of the graduated income tax.

  Time is running out on a push for a graduated income tax income tax in Illinois and it remains to be seen whether a key legislative leader supports the plan.

Backers of the graduated tax say it's more fair than Illinois' current flat tax, because people who earn more can afford to pay more.

But enacting that requires changing the state constitution. Voters would have the final say at the ballot in November, but they won't even be asked if lawmakers don't approve it first.

flickr/danxoneil

  Opponents of Governor Pat Quinn's proposed income tax increase say it will chase jobs out of Illinois. A new report that challenges that assumption.

What to do about Illinois' expiring income tax hike has been the star of the debate this spring. The governor threatens cuts unless its extended, while Republican leaders say keeping the higher tax rate is a bigger threat to the economy.

Ralph Martire, director of the Chicago-based Center for Tax and Budget Accountability, says that's a misunderstanding. He says property taxes are the true obstruction of economic growth.

This week, a proposal for a state constitutional amendment on voting rights, a proposal for a graduated tax rate, and suggestions for a pension change for the city of Chicago.

  An effort to change Illinois' income tax from a flat to a graduated structure is making headway in the General Assembly. The plan, where the more you earn the more you pay, has been revived after a setback last week.

When another proposal for a graduated income tax was up for debate last week, it was shot down before even getting to the floor. But Representative Christian Mitchell, a Democrat from Chicago, says his proposal is different: Its income-based tax brackets are lower than the previous version.

  A tax on millionaires is advancing through the General Assembly ... at the expense of a progressive income tax.

The so-called "Millionaire's Tax" would levy a three percent surcharge on income over a $1 million. House Speaker Michael Madigan says that should raise about a billion dollars, which Illinois would send exclusively to schools.

"My judgment was that it helps education and it calls upon those in the society that are better able to help fund education than others."

  Advocates have been moving for months to give Illinois a progressive income tax. Instead of the same flat rate for everyone, those who make more would pay more. As Hannah Meisel reports, supporters are finally getting specific.

Backers of the plan argue most Illinoisans would get a tax cut.

Senator Don Harmon, a Democrat from Oak Park, says this provides the state a new choice, instead of extending the 2011 income tax hike or making deep cuts to services.

A group of activists are working to end Illinois' flat income tax. They say they've gathered more than 150-thousand signatures so far, and are making their case to Illinois lawmakers.

Income in Illinois is taxed at a uniform five percent, whether you're working at a drive-thru window or you're the CEO of a multi-national corporation.

The people pushing what they call a "fair tax" would have wealthy people pay more, while middle- and lower-income people would pay less. That's already how federal income taxes work.

Charles N. Wheeler III
WUIS/Illinois Issues

Should Illinois have a graduated income tax?

The Illinois legislature certainly thought so, and so did the governor, a little more than eight decades ago. Facing decreased revenues as spending pressures mounted, a special session of the Depression-era 57th General Assembly approved a graduated tax on net incomes, and Gov. Louis L. Emmerson, a Republican, signed the measure into law February 22, 1932.

Within months, however, the Illinois Supreme Court killed the new income tax, ruling that its graduated rates violated the revenue provisions of the 1870 Constitution.