With Rate Legislation, Final Piece Of Graduated Income Tax Plan Falling Into Place
Democrats are almost finished carrying out one of Gov. J.B. Pritzker’s top campaign pledges, as the Illinois House on Thursday approved tax brackets for his proposed graduated income tax.
The legislation pairs with a constitutional amendment approved earlier this week, and would only go into effect if Illinois voters ratify that amendment at next year’s elections.
Pritzker has argued a graduated income tax would stabilize Illinois' finances, in which spending has long outpaced tax revenue.
He's also focused on the fact that only people who earn more than $250,000 per year would see a tax hike under his plan.
But during House debate, Republicans argued Democrats would come back later and raise taxes on the middle class.
“I said it the last time I got up to speak about this issue. I’m going to say it again: These are teaser rates,” said Rep. Margo McDermed, from Mokena. “These are lying rates. Watch out.”
Democrats counter that it’s long been difficult to win support for tax increases in the General Assembly, and they don’t expect that to change in the future.
Republicans also argued higher taxes on the wealthy would hurt entrepreneurship.
But Rep. Mark Walker, a Democrat from Arlington Heights and former Citibank executive, says that isn’t his experience.
“When people get a great idea that they think they’re going to make a million bucks a year, they don't consider for a minute that, ‘Oh my God, I’m not going to start my company because someday when I make that, I’ll take home 950 rather than 962,’” Walker said.
Under the plan, anyone making roughly $250,000 or less would get a slight tax cut on the current rate of just under 5 percent.
It goes up from there, to a maximum of nearly 8 percent on individual income of $750,000 and higher (or $1 million for couples filing jointly).
The legislation is Senate Bill 687. The Senate already voted to approve the measure, but because the House made what backers call a technical change, Senators will have to vote one more time.