Should be part of a plan

 
Posted10/15/2020 1:00 AM

As you may know, Illinois has since the 1970 Constitution had a required flat income tax rate. The theory was that it would be harder to legislature to raise the tax of all the residents versus only a select group. This has worked for many years to keep the flat rate relatively low.

The proposed amendment will allow the legislature to raise the tax rate based on income level. Taxing higher income at a higher rate. The legislature would then more easily be able to raise taxes on the higher income.

                                                                                                                                                                                                                       
 

The proposed amendment does not define the higher income level; however, the legislature has set the higher rate at income above $250,000. Nothing in the amendment requires that threshold to stay at $250,000. The legislature can drop that to $200,000 or even $100,000.

The graduated rate in my opinion may also provide an easier path to tax retirement income. The current proposal does not provide for taxation of retirement income. However, the legislature could provide for a low tax rate of retirement income over a threshold. (say 1% over $75,000) and then gradually increase the rate and lower the threshold.

I would be more comfortable with the graduated rate if it was part a comprehensive plan to solve the current Illinois debt crisis including budget constraints (I have not seen any yet) and some caps on the rate or even a cap on the gap limit between the low and high individual rate.

The question as I see it, do you trust the Illinois legislature with the power granted by the proposed amendment?

Daniel Venturi

Lake Villa

0 Comments
                                                                                                                                                                                                                       
 
Article Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.