Illinois voters will decide at the ballot box in November 2020 if the state will change its existing flat income tax to a progressive tax that has higher rates for higher earners.
The Illinois House passed a constitutional amendment Monday afternoon that will ask voters to repeal the state’s flat income tax of 4.95 percent. The proposed progressive income tax rates would mean modest cuts for most taxpayers, but significantly higher rates for those earning more than $250,000 a year. Rates for all income brackets could be changed at any point by the legislature if voters approve.
The House voted 73-44 to pass the constitutional amendment after hours of debate on Memorial Day. All but one Democrat in the House voted in favor of the constitutional amendment. State Rep. André Thapedi, D-Chicago, did not vote. Republicans were united in opposition.
The state’s structural deficit and more than $134 billion in pension liabilities require adopting a progressive income tax system, said state Rep. Robert Martwick, D-Chicago. He said the state should adopt an income tax system that Democrats have called a “fair tax.”
The solution, Martwick said, is to raise taxes on those who can afford to pay more.
“There are only two choices: You can raise the flat tax or you can adopt a fair tax,” he said.
State Rep. Margo McDermed, R-Mokena, said the progressive tax plan would eventually affect middle-class families because it failed to address the main causes that are driving up the state’s costs.
“I’m going to ask you just like my colleague did to listen to this because if you think that this doesn’t hit you, you’re wrong,” she said. “None of the drivers that have created the structural deficit have been addressed in any way shape or form by this body. And furthermore, even the rates that are listed there are not ‘enough’ in the eyes of people that are sitting here today.”
Voters will decide what happens next in the November 2020 election. To change the state’s constitution, either three-fifths of those voting on the question or a majority of those voting in the election must approve the proposed amendment.
The state Senate previously approved the constitutional amendment, also on a party-line vote.
Illinois has on net lost tens of thousands of residents in each of the past five years, according to U.S Census estimates, and opponents of the progressive tax say that it will further accelerate out-migration. According to many studies, Illinoisans pay the second highest property taxes and among the highest combined local and state taxes in the country.