Wednesday, January 29, 2014

Graduated Income Tax

As a leader and public servant, making decisions based upon the facts and sharing the facts with the public should be a priority. I am concerned about the unsupported information that is being spread about the progressive income tax also known as the graduated income tax.

The income tax increase that was passed in January of 2011 will begin to sunset in January of 2015, changing from 5% to 3.75%.  The state will lose an estimated 2 billion dollars in revenue in fiscal year 2015 and $5 billion in fiscal year 2016. 

In response to this, the General Assembly can choose to do nothing, and try to find a way to cut $7 billion from the already strapped discretionary budget. Another option would be to extend 2011 income tax rate of the 5%, continuing an inflexible and ineffective form of revenue collection.

The final option is a graduated income tax structure.  In order for this to happen both houses in the general assembly would have to pass a bill with 3/5 majority, allowing the proposed amendment language to appear on the November 2014 ballot. Then it would have to be approved by 60% of Illinois voters, or by a majority of those voting for the amendment. If passed, Illinois would then have the option of enacting a progressive income tax. 

It is important to remember that no bills have been, nor can be, proposed that determine the tax structure of a graduated income tax.  However, the whole point of this type of income tax is to tax those with a greater ability to pay with a higher effective tax rate, and provide tax relief to those in a lower and middle income brackets. A graduated income tax is fair and effective.

I would encourage the public to gather as much information as possible on the fiscal health of our state. A Better Illinois is a coalition of community leaders and organizations throughout the state that support this constitutional change as does the League of Women Voters.  Visit their website for information and make sure you know all the options, so when the time comes you can make an informed decision.

The League of Women Voters of Illinois website can be found here.

A Better Illinois website can be found here.

No comments:

Post a Comment