Illinois

The Tax Cuts and Jobs Act, which was introduced on November 2 in the House of Representatives, includes some provisions that raise taxes and some that cut taxes, so the net effect for any particular family’s federal tax bill depends on their situation. Some of the provisions that benefit the middle class — like lower tax rates, an increased standard deduction, and a $300 tax credit for each adult in a household — are designed to expire or become less generous over time. Some of the provisions that benefit the wealthy, such as the reduction and eventual repeal of the estate…

The “tax reform framework” released by the Trump administration and congressional Republican leaders on September 27 would not benefit everyone in Illinois equally. The richest one percent of Illinois residents would receive 69.4 percent of the tax cuts within the state under the framework in 2018. These households are projected to have an income of at least $651,700 next year. The framework would provide them an average tax cut of $84,170 in 2018, which would increase their income by an average of 3.1 percent.

This week, Pennsylvania lawmakers risk defaulting on payments due to their extremely overdue budget and Illinois legislators will borrow billions to start paying their backlog of unpaid bills. Governing delves into why there were more such budget impasses this year than in any year in recent memory. And Oklahoma got closure from its Supreme Court on whether closing special tax exemptions counts as "raising taxes" (it doesn't).

A tiny fraction of the Illinois population (0.8 percent) earns more than $1 million annually. But this elite group would receive 54.9 percent of the tax cuts that go to Illinois residents under the tax proposals from the Trump administration. A much larger group, 41.0 percent of the state, earns less than $45,000, but would receive just 3.9 percent of the tax cuts.

Earlier this year, the Trump administration released some broadly outlined proposals to overhaul the federal tax code. Households in Illinois would not benefit equally from these proposals. The richest one percent of the state’s taxpayers are projected to make an average income of $2,726,200 in 2018. They would receive 56.1 percent of the tax cuts that go to Illinois’s residents and would enjoy an average cut of $134,270 in 2018 alone.

Illinois and New Jersey made national news earlier this month after resolving their contentious budget stalemates. But they weren’t the only states working through (and in some cases after) the holiday weekend to resolve budget issues.

This week, several states attempt to wrap up their budget debates before new fiscal years (and holiday vacations) begin in July. Lawmakers reached at least short-term agreement on budgets in Alaska, New Hampshire, Rhode Island, and Vermont, but such resolution remains elusive in Connecticut, Delaware, Illinois, Maine, Pennsylvania, Washington, and Wisconsin.

For Immediate Release: May 4, 2016   Contact: Jenice R. Robinson, 202.299.1066 X29, [email protected] Earlier today, the Illinois Department of Revenue (ILDOR) released an economic analysis of the tax changes included in House Bill 689, which would transform the state’s personal income tax from its current flat rate to a graduated-rate system. The following is […]