How voters could decide future of tax

SPRINGFIELD -- Just days after the Illinois House rejected a possible tax increase on the state's wealthiest individuals, the Illinois Senate is advancing a similar plan.

A key Senate committee narrowly approved Wednesday letting voters decide if Illinois income taxes should be carved up into tax brackets, likely to result in those with higher incomes paying at higher rates, as in the federal tax system.

State Sen. Kwame Raoul, a Chicago Democrat pushing the legislation, said while the House proposal went after the wealthy, his plan is designed to ease the burden on the middle class.

"It speaks to the main target of this issue, (which) is fairness," Raoul said.

Illinois currently has a flat tax. In fact, the state constitution requires it. The individual state income tax rate is 3 percent regardless of how much someone makes. The income tax businesses pay is a flat pay 4.8 percent, with an additional 2.5 percent replacement tax.

The state constitution also requires the corporate and individual income tax rates not to exceed a ratio of 8:5. That serves to forbid lawmakers from hiking business taxes too far.

But the constitutional amendment approved by the Senate Executive Committee would let voters choose if that system should be scrapped in favor of creating tax brackets with different rates. No specific income brackets or rates are included. If the plan were to be approved, lawmakers would then have to approve a new tax structure.

The Taxpayers' Federation of Illinois disagreed with the concept of the Senate proposal, but supported putting the idea to voters.

Last week, the Illinois House voted down another constitutional amendment that would have let voters decide if households making more than $250,000 should have their tax rates doubled to 6 percent. The plan would have raised $3 billion annually to be divvied up among schools, road and bridge construction, and tax breaks for those making less than a quarter-million dollars.

Republican critics called it class warfare and the amendment was rejected.

In order for any constitutional amendment to go before voters in November, it would have to be approved by both the House and Senate by May 4.