The facts on Illinois' graduated income tax proposal

For the past two years, no issue has consumed Illinois politics as much as the proposed graduated income tax plan.

Gov. J.B. Pritzker made changing the state's income tax structure from a flat rate to one that taxes income at increasingly higher rates a cornerstone of his 2018 campaign, saying if it is approved, the wealthiest residents will pay more while 97% of Illinoisans would pay the same or less. It's been dubbed the "Fair Tax" by supporters.

The legislature approved the rate structures last year and got the initiative on the ballot. It all comes to a head with Tuesday's ballot question on the proposed change to the state's constitution.

What is the question on the ballot?

The very first choice Illinois voters are asked to make on their ballots this year is whether to eliminate the constitutional requirement that income is taxed at the same rate. Currently, that rate is 4.95%.

What will happen if it's approved?

The Democratic majority in both chambers as well as the Democratic governor have already approved a tax-rate structure that would pave the way for Illinois to enact graduated income tax rates. In the future, the legislature could vote to revert to a flat tax rate.

How would the graduated rates work?

The first $10,000 in income would be taxed at 4.75%, the next $90,000 would be taxed at 4.90%, and the next $150,000 would be taxed at 4.95%, the current rate.

Any income over $250,000 would be taxed at 7.75%. The rate would climb to 7.85% for income over $350,000 for single filers and $500,000 for couples.

The biggest tax increase would be for single filers with income over $750,000 and married couples with incomes over $1 million. Their tax rate would be 7.99%, and unlike people in lower income brackets, they would pay that flat rate on all of their income.

The corporate income tax rate would also be a flat 7.99%. But most small business owners in Illinois claim profits of their company on their individual income tax returns, which would be taxed on the graduated scale.

What if it fails?

The flat tax rate would stay in place, but Democratic lawmakers have said they would likely seek to increase the rate to as much as 5.95% in order to raise revenue to pay down state debt.

Why do supporters want it?

Ultimately, supporters want a graduated income tax because it is expected to increase state revenue as much as $3.6 billion a year, which will help the state pay off debt and other bills. They also say a graduated income tax helps offset the state's other regressive taxes and fees that burden lower-earning workers more than their wealthier counterparts.

The federal government uses a graduated income tax, as do most states.

What do opponents say?

Critics of the initiative argue that creating a graduated income tax rate structure paves the way for legislators to increase income taxes piecemeal rather than on everyone at once. They contend the legislature can't be trusted not to raise tax rates on particular earnings brackets once the measure is approved and complain that legislators haven't earmarked the additional revenue being generated.

Who is in favor of it?

Most Democratic lawmakers, Vote Yes For Fairness, the Center for Tax and Budget Accountability, labor unions, AARP, State Universities Annuitants Association.

Who is opposing it?

Most Republican lawmakers, the Civic Federation, the Illinois Policy Institute, Coalition to Stop the Proposed Tax Hike Amendment, the Illinois Chamber of Commerce, the Illinois Retail Merchants Association.