A Progressive Strategy for Meeting Illinois’ Current and Future Revenue Needs
reportOver the course of the past year, Illinois’ personal income tax has received a great deal of attention. In March, Governor Pat Quinn put forward a plan to raise the existing income tax rate of 3 percent to 4.5 percent and to increase the value of personal and dependent exemptions from $2,000 to $6,000; the plan, which would, if enacted, generate roughly $3 billion per year, formed the centerpiece of the Governor’s efforts to address Illinois’ massive budget deficit. More recently, Comptroller Dan Hynes, in announcing his candidacy for Governor, called for the creation of a graduated income tax in Illinois, an approach to taxation that is currently barred by the state constitution and that would require approval by both the Illinois General Assembly and the voters of the state before it became law. In particular, Comptroller Hynes proposed a rate structure that would leave the present 3 percent rate in place for all taxpayers with incomes below $200,000 but that would impose rates ranging from 3.5 percent to 7.5 percent on incomes above that amount, with the highest rate applying solely to income in excess of $1 million. Like Governor Quinn’s own income tax plan, Comptroller Hynes’ proposal is the focal point of his campaign’s tax and budget platform; in fact, his campaign asserts that it will generate some $5.5 billion annually, by far the largest fiscal policy initiative detailed by the Comptroller to date.
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