Some Illinois lawmakers want wealthier residents to pay more taxes through a higher income tax rate. Four Democratic legislators are considering drafting a constitutional amendment to allow a progressive income tax. Those lawmakers are joined by the Center for Budget and Tax Accountability, which says Illinois could generate $2.4 billion annually in new revenue and provide tax relief to 94 percent of Illinoisans with its plan.
Ralph Martire, director of the center, says the state’s problem isn’t that it spends too much – rather it makes too little. Martire says if adjusted for inflation Illinois’ spending hasn’t changed significantly.
“There’s been no major ramp up in spending in Illinois. Absolutely not! Yet despite that we have yawning deficits. Why would that be? Because our tax system focuses on low and middle-income families,” Martire says.
Martire says lower and middle-income families are the economy’s best consumers because they have to spend most of their income. That means the current tax system slows economic progress, Martire says, because those groups are spending less with the current flat tax system.
“You focus taxes on upper income families, they don’t stop spending. Why? They have so much of a share of the growth in income over time that any additional tax burden at the top would frankly not cut in to their spending,” Martire says.
Two proponents, State Sens. Kwame Raoul (D-Chicago) and Mike Frerichs (D-Champaign), have previously introduced legislation to create a graduated income tax, and could introduce new measures this session. State Sen. Toi Hutchinson (D-Chicago Heights) and State Rep. William Davis (D-Homewood) could also propose the idea.