Will Illinois Change Its Income Tax?

By Kevin Robinson in News on Apr 7, 2008 2:28PM

With Illinois suffering from national economic woes, statewide economic stimulus plans are floating around in both houses of the General Assembly. In the House, some Democrats are pushing a legislative effort to double the income tax to six percent on residents earing more than $250,000 a year. The increase is expected to generate around $3 billion annually, and would fund schools and income-tax relief for lower- and middle-income families. Separately, senate Democrats, along with some representatives, are pushing an amendment to the state constitution that would eliminate the flat tax, implementing instead a graduated income tax, putting Illinois in line with both the federal government and most other states.

Senate Republicans are pushing their own tax reform measure as well. They want to lower the gas tax, and eliminate the Illinois Health Facilities Planning Board, freeing up billions of dollars in delayed hospital construction. “We're for abolishing the Illinois Health Facilities Planning Board to do about $3 billion worth of projects and put 8,000 people to work,” GOP Sen. Kirk Dillard told the Tribune. “And that's just on top of the corruption problems that want to lead us to abolish that board, which is the central focus of the Tony Rezko trial going on in Chicago.”

It's too soon to say which plan (if any) will make it out of the General Assembly, but changing the overall tax structure is no easy feat. It would require a three-fifths margin in both the House and Senate, and would have to be voted on in a statewide referendum. Meanwhile, a proposal by Sen. James Meeks of Chicago to raise the individual income tax to five percent and the corporate income tax to eight percent is still under consideration. It has passed committee and is awaiting a senate vote.

Image via BonuS Saves