November 21, 2023
By: Katie Clancy
The Tax Foundation recently ranked Illinois the 37th least competitive business tax climate in the country. The flat income tax is the only policy keeping the state out of the bottom ten.
Many tax reforms need to be tackled to improve the ranking and welcome more businesses and jobs to Illinois. And despite being roundly rejected by voters in 2020, some Illinois lawmakers still haven’t given up on changing the constitution and creating a graduated income tax.
Last spring, Governor Pritzker expressed his desire to try once again and implement a progressive income tax. Senator Robert Martwick from Chicago re-introduced legislation to make the change last session.
Why is changing the flat tax, the only policy keeping Illinois afloat, the lone tax reform pursued by lawmakers?
Part of the reason is that Illinois legislators can’t stop spending your tax dollars. Right now, migrant medical costs are reaching almost $1 billion, pensions are barely 50% funded, and Pritzker just handed state AFSCME workers a 19% raise.
With a graduated income tax rate, politicians don’t have to anger all Illinois families and businesses at once. They can dip in and out of tax brackets and raise taxes that make the most sense at that time.
As long as state government continues its spending spree, your hard-earned paycheck becomes more and more vulnerable to higher taxes and perhaps another push for a graduated income tax hike.