Illinois is in budget-cutting mode, while leaving sources of tax revenue untouched, according to a progressive group. Illinois taxes low- and middle-income residents at a higher rate than the wealthy, when you consider all state and local taxes as a percentage of income. The Keystone Research Center says if the top 1 percent (incomes over $1.37 million) paid taxes at the same rate as the middle 20 percent, the state would gain $5.1 billion a year. If the top 20 percent paid taxes at the same rate as the middle 20 percent, the state would realize $8.6 billion.
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Jared Bernstein, once the head of the White House Task Force on the Middle Class, says that sounds about right. “Illinois has a uniquely regressive state tax system. The share of taxes paid by lower-income families is, quite remarkably if you think about this inequality problem we’re dealing with nationwide, actually higher than the share paid by wealthy families,” he said Thursday morning before delivering a presentation at a symposium on the state economy at Loyola University in Chicago.
Bernstein says the budget cutting that the governor proposes will not produce prosperity, and the consequences of it will fall on the lower and middle class.