Farm Bureau Remains Opposed to Proposed Progressive Income Tax
A cornerstone to Governor J.B. Pritzker’s budget plan is the implementation of the progressive income tax. The Pritzker tax is expected to generate an additional $3.57 billion from individual taxpayers and $350 million from a higher corporate tax annually for the state. For Pritzker and his allies to implement any change to the state’s income tax structure, the state’s constitution would need to be amended.
Farm Bureau Position
Farm Bureau policy supports a flat-rate state income tax. Policy is reviewed and discussed annually by farmer member delegates during numerous meetings, including the annual delegate session in December.
Farm Bureau feels that a progressive income tax like the Pritzker tax will make it easier for the state to target key economic sectors for higher taxes in the future. The continuing fiscal crisis facing the state budget will lead lawmakers to look for politically feasible options for raising tax revenue. Separate graduated income tax levels may lead to future tax increases.
Additionally, the Pritzker tax sends yet another message to potentially new or expanding businesses that Illinois is not a business-friendly state.
Background
Opportunities to amend the state’s constitution are very limited. One method is for the Illinois General Assembly to approve, by super majority, a Joint Constitutional Amendment.
Senate Joint Constitutional Amendment 1 (SJRCA 1), sponsored by Senator Don Harmon of Oak Park proposes to amend the constitution to allow Illinois to implement any kind of a tax on income. The constitutional amendment does not specify a rate and it does not specify a graduated or non-graduated tax. Essentially SJRCA 1 eliminates the state’s flat income tax protection, empowering lawmakers to pass additional income taxes on the same dollar earned. This change would allow for the nation’s highest tax on business income.
The change would have to be approved by voters during the election of 2020.
“We will continue to oppose the creation of a progressive income tax in Illinois,” said Illinois Farm Bureau® President Richard Guebert, Jr. “Our members have made it clear that a flat rate state income tax is the preferred way to assess an income tax. The passage of SJRCA 1 and the companion tax rate bill moves Illinois one step closer to a progressive tax.”
Proposed Tax Changes
The existing state income tax system taxes individuals at 4.95 percent. The proposed Pritzker tax rates are provided below:
|
|
Proposed tax rate |
Existing tax rate |
|
Tax return with net income up to $9,999 |
4.75% |
4.95% |
|
Tax return with net income between $10,000 and $99,999 |
4.9% |
4.95% |
|
Tax return with net income between $100,000 and $249,000 |
4.95% |
4.95% |
|
Tax return with net income between $250,000 and $349,000 |
7.75% |
4.95% |
|
Tax return with net income between $350,000 and $749,999 |
7.85% |
4.95% |
|
Tax return with net income over $750,000 |
7.99% |
4.95% |
The proposed language essentially allows the state to implement any kind or level of income taxes. Given Illinois’ continuing fiscal crisis, do you want the state to have access to your pocketbook?
