v>A graduated income tax system would create three tax brackets for Illinois residents. Under the proposal from State Sen. Don Harmon (D-Oak Park), a 2.9 percent tax would be imposed on all income up to $12,000, followed by a 4.9 percent tax on income between $12,000 and $180,000. Income above that would be charged at 6.9 percent. Harmon says it’s important to note that those thresholds don’t change how all of your income would be taxed.
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“It’s not like you trip over the line and suddenly you have a higher tax rate applied to all of your income,” Harmon said. “The lower tax rates apply to the lower income, no matter who earns it. The higher rates apply only to the higher income earned by those earning in excess of that bracket.” Harmon claims this would amount to a tax cut to 94 percent of people in the state. Opponents of the legislation disagree. A statement from Americans for Prosperity Illinois claims Harmon’s plan is essentially a tax hike, because rates for most would be above the 3.75 percent rate that would be in place if the temporary income tax increase is allowed to expire. Harmon, however, is comparing it to the increased rate of 5 percent.
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