'Millionaires' Tax' Would Give IL Cover To Hike On Everyone

Illinois Democrats Push for Tax Increase

Illinois Democrats are pushing for a "millionaires' tax" that would increase taxes on the state's highest earners. The proposal would raise the state's personal income tax rate from 4.95% to 5.95% for individuals earning more than $1 million per year. The tax would also apply to trusts and estates with incomes over $1 million.

Proponents Say Tax Will Fund Essential Services

Proponents of the tax say it is necessary to raise revenue to fund essential services such as education, healthcare, and infrastructure. They argue that the wealthy can afford to pay more in taxes and that the tax would help to reduce income inequality. Democrats intend to implement social equity provisions like expanding access to affordable housing and childcare, expanding tax credits for the working poor, and investing more in mental health services.

Opponents Say Tax Will Hurt Economy

Opponents of the tax say it will hurt the economy by driving away wealthy residents and businesses. They argue that the tax would make Illinois less competitive with other states and that it would ultimately lead to higher taxes for everyone. The Civic Federation, a nonpartisan budget watchdog group, estimates the tax increase would generate $1.35 billion in additional revenue for the state.

Tax Increase Would Be Largest In State History

If passed, the tax increase would be the largest in Illinois history. The state's personal income tax rate has not been increased since 1991. The tax increase would also make Illinois the state with the highest personal income tax rate in the Midwest. The top marginal income tax rate in neighboring states ranges from 3.23% in Indiana to 6.27% in Minnesota.

Tax Hike Faces Uncertain Future

The future of the tax hike is uncertain. The proposal has passed the Illinois House of Representatives, but it faces an uncertain future in the Senate. The Senate is controlled by Democrats, but some moderate Democrats have expressed concerns about the tax increase. The tax hike is also opposed by Governor J.B. Pritzker, who has said he will veto the bill if it reaches his desk.