Illinois
2024 State Tax Ballot Questions: Voters to Weigh in on Tax Changes Big and Small
October 17, 2024 • By Jon Whiten
As we approach November’s election, voters in several states will be weighing in on tax policy changes. The outcomes will impact the equity of state and local tax systems and the adequacy of the revenue those systems are able to raise to fund public services.
Illinois Fund Our Futures Coalition: Funding Our Futures: The Equitable Revenue Policies Illinois Families Need to Thrive
April 18, 2024
Read the report here.
Scholars Strategy Network: Tax Policy as a Potential Tool for Reducing Infant Mortality
April 17, 2024
Increased tax revenues and increased tax progressivity need to be further explored as policy solutions in Illinois. More specifically, the adoption of worldwide combined reporting and a state-level child tax credit, could help prevent infant deaths in our state.
Illinois: Who Pays? 7th Edition
January 9, 2024 • By ITEP Staff
Illinois Download PDF All figures and charts show 2024 tax law in Illinois, presented at 2023 income levels. Senior taxpayers are excluded for reasons detailed in the methodology. Our analysis includes nearly all (98.6 percent) state and local tax revenue collected in Illinois. State and local tax shares of family income Top 20% Income Group […]
Illinois Voucher Tax Credits Don’t ‘Invest in Kids,’ They Invest in Inequality
June 12, 2023 • By Carl Davis
By allowing their school privatization tax credit to expire at the end of the year, Illinois lawmakers can take a meaningful step toward better tax and education policy, and a clear show of support for our nation’s public education system.
State Tax Codes & Racial Inequities: An Illinois Case Study
May 14, 2021 • By Lisa Christensen Gee
Earlier this year, ITEP released a report providing an overview of the impacts of state and local tax policies on race equity. Against a backdrop of vast racial disparities in income and wealth resulting from historical and current injustices both in public policy and in broader society, the report highlights that how states raise revenue to invest in disparity-reducing investments like education, health, and childcare has important implications for race equity.
Voters Have the Chance in 2020 to Increase Tax Equity in Arizona, Illinois, and California, And They Should
October 22, 2020 • By Marco Guzman
There’s a lot at stake in this election cycle: the nation and our economy are reeling from the effects brought on by the coronavirus pandemic and states remain in limbo as they weigh deep budget cuts and rush to address projected revenue shortfalls.
Illinois’s Flat Income Tax Amounts to a Tax Subsidy for the Wealthiest Illinoisans that Compounds Income and Wealth Inequalities
September 17, 2020 • By Lisa Christensen Gee
This November, Illinoisans will decide whether to amend the state constitution to allow a graduated income tax. A “yes” vote on the Illinois Fair Tax constitutional amendment will make effective legislation that will replace the current flat tax rate of 4.95 percent with graduated rates that cut taxes for those with taxable income less than $250,000 and institute higher marginal rates on taxable incomes greater than $250,000.
New 20-Year Study Provides Insight on How State Tax Systems Worsen Inequality and the Racial Wealth Gap
September 17, 2020 • By ITEP Staff, Lisa Christensen Gee
A new study finds that over the last 20 years, Illinois’s tax system has effectively sapped $4 billion more from Black and Hispanic communities than it would have under a graduated income tax while also allowing the state’s highest-income (mostly white) households to pay $27 billion less in taxes, the Institute on Taxation and Economic Policy (ITEP) said today.
Illinois’s Flat Tax Exacerbates Income Inequality and Racial Wealth Gaps
September 17, 2020 • By Lisa Christensen Gee
Flat or graduated personal income taxes have varying effects on the annual individual tax liabilities of taxpayers at different income levels. Less examined is how tax structures affect income inequality and racial wealth gaps. This brief illustrates how Illinois’s historic flat income tax structure compares to the proposed Fair Tax through a multi-year retrospective analysis. It shows that Illinois’s flat income tax in lieu of a graduated rate tax used by most states amounts to a tax subsidy for the wealthiest Illinoisans that compounds income inequality and racial wealth gaps.
Chicago Resilient Families Task Force: EITC Expansion and Modernization
February 28, 2020
Expanding and modernizing the Earned Income Tax Credit will put more money back in the pockets of the people who need it most. Recent polling suggests such policies would be popular, with 70% of respondents supporting a modernized EITC statewide and 80% supporting such an effort in Chicago. Read more
Promoting Greater Economic Security Through A Chicago Earned Income Tax Credit: Analyses of Six Policy Design Options
September 12, 2019 • By Lisa Christensen Gee
A new report reveals that a city-level, Chicago Earned Income Tax Credit would boost the economic security of 546,000 to 1 million of the city’s working families. ITEP produced a cost and distributional analysis of six EITC policy designs, which outlines the average after-tax income boost for families at varying income levels. The most generous policy option would increase after-tax income for more than 1 million working families with an average benefit, depending on income, ranging from $898 to $1,426 per year.
Many States Move Toward Higher Taxes on the Rich; Lower Taxes on Poor People
July 18, 2019 • By Meg Wiehe
Several states this year proposed or enacted tax policies that would require high-income households and/or businesses to pay more in taxes. After years of policymaking that slashed taxes for wealthy households and deprived states of revenue to adequately fund public services, this is a necessary and welcome reversal.
Chicago Resilient Families Task Force: Big Shoulders, Bold Solutions: Economic Security for Chicagoans
February 25, 2019
People with low and middle-incomes are financially savvy in ways that are often underestimated, but despite this are on thin ice financially. Despite doing all the right things, they are caught in a trap that is very hard to escape. Wages are falling behind and jobs are increasingly structured in ways that foster precariousness instead […]
Voices for Illinois Children November Newsletter
November 21, 2018
The Institute for Taxation and Economic Policy (ITEP) released the sixth edition of its “Who Pays?” report on state tax systems. Voices’ policy analyst John Gordon detailed the findings of the report in a blog post. Illinois ranks #8 among ITEP’s “Terrible Ten” in terms of regressive state tax systems.
Cherokee Tribune & Ledger-News: Financial Watchdog: Pritzker’s Spending Promises Would Raise Taxes on Middle Class
November 1, 2018
The Institute on Taxation and Economic Policy says Illinois has one of the most regressive taxes in the nation, largely due to its flat income tax. In its annual “Who pays?” report, the institute said the poorest 20 percent of Illinois households pay 14 percent of their income in taxes because of the flat tax in addition to high sales and property taxes.
Voices for Illinois Children: Who Pays In Illinois? Mostly The Poor And Middle Class
October 29, 2018
A new report from the Institute of Taxation and Economic Policy (ITEP) shows the poorest 20 percent of Illinois households pay nearly twice as much in state and local taxes as the richest one percent. As a result, ITEP ranks Illinois as the eighth most regressive tax system in the country.
News and Tribune: In Indiana and Illinois, Taxes Hit Low-earners Hard
October 25, 2018
TERRE HAUTE -- Low-earning residents of Indiana and Illinois pay a greater share of state and local taxes than those in all other Midwestern states, and those in most states nationally, according to a new study by a non-partisan think tank.
Chicago Tribune: A Key Issue in Illinois Governor Race — Gov. Bruce Rauner, J.B. Pritzker Have Very Different Plans for State Income Tax
October 18, 2018
Last year, state lawmakers raised income taxes and ended the state’s two-year budget impasse over the passionate objections and veto of Rauner. At the time, the governor called the move “another step in Illinois’ never-ending tragic trail of tax hikes.”
Illinois: Who Pays? 6th Edition
October 17, 2018 • By ITEP Staff
ILLINOIS Read as PDF ILLINOIS STATE AND LOCAL TAXES Taxes as Share of Family Income Top 20% Income Group Lowest 20% Second 20% Middle 20% Fourth 20% Next 15% Next 4% Top 1% Income Range Less than $21,800 $21,800 to $40,800 $40,800 to $63,800 $63,800 to $109,500 $109,500 to $231,500 $231,500 to $537,400 over $537,400 […]
Tax Cuts 2.0 – Illinois
September 26, 2018 • By ITEP Staff
The $2 trillion 2017 Tax Cuts and Jobs Act (TCJA) includes several provisions set to expire at the end of 2025. Now, GOP leaders have introduced a bill informally called “Tax Cuts 2.0” or “Tax Reform 2.0,” which would make the temporary provisions permanent. And they falsely claim that making these provisions permanent will benefit […]
Center for Tax and Budget Accountability: Cutting Taxes for the Middle Class and Shrinking the Deficit
April 30, 2018
According to the Institute for Taxation and Economic Policy, Illinois ranks as the fifth-most-regressive state and local tax system in the country — and the most regressive in the Midwest. In Illinois, the top one percent of income earners pay just 4.6 percent of their income in state and local taxes, while the middle 20 percent of workers pay more than double that, coming in at 10.8 percent of income, and the bottom 20 percent of earners have almost three times the tax burden of the wealthiest, coming in at 13.2 percent.
How the Final GOP-Trump Tax Bill Would Affect Illinois Residents’ Federal Taxes
December 16, 2017 • By ITEP Staff
The final tax bill that Republicans in Congress are poised to approve would provide most of its benefits to high-income households and foreign investors while raising taxes on many low- and middle-income Americans. The bill would go into effect in 2018 but the provisions directly affecting families and individuals would all expire after 2025, with […]
How the House and Senate Tax Bills Would Affect Illinois Residents’ Federal Taxes
December 6, 2017 • By ITEP Staff
The House passed its “Tax Cuts and Jobs Act” November 16th and the Senate passed its version December 2nd. Both bills would raise taxes on many low- and middle-income families in every state and provide the wealthiest Americans and foreign investors substantial tax cuts, while adding more than $1.4 trillion to the deficit over ten years. The graph below shows that both bills are skewed to the richest 1 percent of Illinois residents.
How the Revised Senate Tax Bill Would Affect Illinois Residents’ Federal Taxes
November 13, 2017 • By ITEP Staff
The Senate tax bill released last week would raise taxes on some families while bestowing immense benefits on wealthy Americans and foreign investors. In Illinois, 51 percent of the federal tax cuts would go to the richest 5 percent of residents, and 15 percent of households would face a tax increase, once the bill is fully implemented.
