Election 2020: The Illinois Fair Tax: What is it?

In addition to crucial election races, Illinois residents will vote on the Illinois Fair tax this November. The Illinois Fair Tax is a proposed amendment that would change the State Income Tax system from a flat tax to a graduated income tax where those who make more pay more.  According to the Tax Policy Center, a tax system is considered progressive when the household tax burden rises with the household income.

Currently, the IL Tax rate is 4.95% and would be replaced by a Progressive Tax system based on income.   The current proposal is shown as follows:

Illinois Fair Tax Election Chicago Defender

Income

Proposed Tax Rate
$0-$9,999 4.75%
$10k-99,999 4.90%
$100K-249,999 4.95%
$250K-499,999 7.75%
$500K-999,999 7.85%
$1,000,000 and up

7.95%

When Illinois voters cast their votes, they will vote yes or no to the proposed amendment with the following language included on the ballot:

Proposed Amendment to the 1970 Illinois Constitution Explanation of Amendment”

“The proposed amendment grants the State authority to impose higher income tax rates on higher income levels, which is how the federal government and most other states do it. The amendment would remove the portion of the Revenue Article of the Illinois Constitution that is sometimes referred to as the “flat tax,” that requires all taxes on income to be at the same rate. The amendment does not itself change tax rates. It gives the State the ability to impose higher tax rates on those with higher income levels and lower tax rates on those with middle or lower income levels. You are asked to decide whether the proposed amendment should become a part of the Illinois Constitution.”

With Illinois strapped for cash, many proponents feel this is the most equitable way to bring much-needed revenue to the State.  Currently, Illinois is one of eight states with a flat tax.  Thirty-two states have a form of a progressive or graduated tax rate. Gov. Pritzker promised to implement a gradual tax on the State’s wealthiest individuals during his election campaign and has an opportunity to make good on that promise should voters say yes.

Opponents of the proposed amendment believe this will give the State’s government “a blank check” for spending, drive people and small business owners to neighboring states like Indiana, and further damage the already suffering Illinois economy.   Those who oppose this amendment say the bill locks the State in this graduated tax structure since it amends its constitution.  They say it does not address or dictate where the additional revenue would be directed to and gives the unlimited state power to spend money; however they want.

Supporters of the amendment disagree, stating the tax bill reduces the burden on lower and middle-class residents, helps small business owners, and addresses the deficit.  They say the excess revenue would help fund schools and lower property taxes.  Under the proposed amendment, Gov. Pritzker, a millionaire, would be included in the percentage of residents paying 7.95%.

To find out how the Illinois Fair Tax would affect you and your household, check out the Fair Tax Calculator to see how much your family would save in taxes or how much your taxes would increase based on your household’s income.

Gov. Pritzker insists that over 90% of Illinois residents would see tax relief with this amendment.  Illinois residents vote on the Illinois Fair Tax in this Election happening November 3rd.

Danielle Sanders is a writer and journalist living in Chicago.  Find her on social media @DanieSandersOfficial.

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