Illinois House committee OKs progressive income tax plan
SPRINGFIELD -- A measure asking voters in November to tax Illinois' wealthiest residents at higher rates is heading to the full House for consideration.
The plan by Democratic state Rep. Lou Lang of Skokie got approval Tuesday in the House Revenue Committee.
The current income tax rate is 3.75 percent. Under the measure most residents would see a slight decrease in what they pay.
The tax rate would be 3.5 percent for joint filers making $200,000 or less and individuals earning $100,000 or less. The rates would increase gradually by income until they reached 9.75 percent for joint filers making more than $1.5 million and individuals earning more than $1 million.
Lang says the measure could generate $1.9 billion.
The Illinois Chamber of Commerce says a progressive income tax would hurt businesses.
State Sen. Matt Murphy, a Palatine Republican speaking about a separate proposal to change the state constitution to allow for a graduated tax, said he worries it would open the door for higher business taxes in the future.
That proposal would eliminate the current constitutional restriction that the ratio between the corporate tax rate and the individual rate cannot exceed 8 to 5. As it stands now, corporations pay 5.25 percent and individuals pay 3.75 percent.
State Sen. Don Harmon, the Oak Park Democrat who sponsored the amendment, offered to keep that restriction, but Murphy countered it still wouldn't win his support.
"I'd have other arguments. I don't like this bill for a whole lot of reasons," Murphy said.
Harmon argued Illinois would join many other states and the federal government that have a graduated income tax.
"We are surrounded by states with a fair tax system: Wisconsin, Minnesota, Iowa, Missouri," he said. "If we had Wisconsin's income tax structure here in Illinois, we wouldn't be having these conversations because we would have so much more revenue available to us; we would have passed a balance budget."
•Daily Herald staff writer Mary Hansen contributed to this report.