IFB opposes graduated income tax

Proposal would require constitutional amendment be placed on the November 2020 ballot.

As the battle over Gov. J.B. Pritzker's proposed graduated income tax heats up in Springfield, Illinois Farm Bureau continues to voice its opposition with elected officials. (Illinois Farm Bureau file photo)

By Kay Shipman

With the Illinois General Assembly starting a two-week break, some very large issues loom ahead. One of those includes Gov. J.B. Pritzker’s initiative to change the state’s current flat income tax system to a graduated income tax. Illinois Farm Bureau’s position on any graduated income tax is clear — opposed.

IFB policy states the organization prefers a flat rate state income tax.

“We have been calling upon the Illinois General Assembly and other leaders of Illinois to not create a graduated income tax. We started communicating our opposition to the graduated income tax with the gubernatorial candidates this past summer and have continued ever since,” said IFB President Richard Guebert Jr. “Every legislator has been made aware of IFB’s opposition.”   

Pritzker’s plan, dubbed the Fair Tax for Illinois, comprises six income tax rates from 4.75 percent to 7.95 percent. The governor estimates this system would generate $3.4 billion.

Under the existing state income tax system, individuals are taxed at a rate of 4.95 percent. Under the governor’s proposed graduated income tax, an individual with a net income up to $10,000 would be taxed at 4.75 percent; $10,001 to $100,000, 4.9 percent; $100,001 to $250,000, 4.95 percent; $250,001 to $500,000, 7.75 percent; and $500,001 to $1 million, 7.85 percent. Individuals with income of more than $1 million will pay 7.95 percent on the entire income amount, not just the incremental portion above $1 million.

“The process to create a graduated income tax system is not simple,” said Kevin Semlow, IFB director of state legislation. “The House and Senate must approve a proposed constitutional amendment allowing a graduated income tax in order to place it on the November 2020 ballot. If that occurs, the voters will have to approve the question at that election.”

Semlow continued: “The proposed constitutional amendment will allow the General Assembly to pass into law any type of income tax. Voters will not be setting the actual rate; that will be done by state law. This creates a lot of concern because the General Assembly can follow the governor’s suggested graduated rate schedule or set completely different tax rates of its own. Currently, the Illinois Constitution authorizes the state to have a flat rate income tax, and the General Assembly sets the rate. The process will be the same if a constitutional amendment creating a graduated income tax is approved by the voters.”

The General Assembly returns to Springfield April 30. 

“After returning to the Illinois Statehouse, the General Assembly has five scheduled weeks of session before the scheduled May 31 adjournment,” Guebert noted. “There are hundreds of bills, the approval of a state budget and other large issues to address during those weeks, including a potential graduated income tax proposal. There is a lot of work to do.”