State Senator Pushes New Graduated Income Tax Plan

SPRINGFIELD -- It's been said there are two sides to every story, and the latest graduated income tax proposal can be considered both a tax cut and a tax increase depending on how you look at it.

That's because under the temporary income tax hike set to expire at the end of the year, Illinois residents pay 5% now but will pay 3.75% after the 1st of the year unless the law is changed.

State Senator Don Harmon (D-Oak Park) wants the law changed, and introduced his graduated income tax proposal Tuesday.  Harmon's plan creates three tax tiers, but also includes variations within those tiers.  In the end, he claims his fair tax proposal would mean a tax cut from the current 5% tax rate for those making up to $200,000, but the same analysis shows it would be a tax increase for all but the lowest income brackets over the 3.75% rate.  A copy of his proposal is attached above.

Harmon says the alternative of allowing the temporary tax to expire would be dire.  “The choice we have is to extend the flat tax or to cut 13,400 teachers from the classroom, to take 95,000 kids off of early childhood education, to say ‘no’ to 30,000 college students wishing to get a MAP grant, to close 11 prisons and release 15,000 prisoners, to lay off 3,000 corrections officers, to cut the state police by 30%,” said Sen. Harmon. “This is a third way. This is a way to provide the services people need and to do so in a way that provides tax relief for 94% of Illinois families.”

Republicans have accused Democrats of using scare tactics when it comes to income taxes, and have stated their unanimous opposition to a graduated income tax system because they say it simply pours more tax dollars into a broken state government.  Their opposition is going to make it tough for any bill to pass the Senate, since it would require a 2/3rd's majority to change the state constitution.  If passed, it would then be followed by a vote of the people in November,   

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