As the tax reform debate begins to heat up, businesses and investors are beginning to pay closer attention to the House GOP Tax Reform Blueprint, a tax plan released last June by Speaker Paul Ryan and House Ways and...
- The Tax Policy Blog
- Illinois Progressive Tax Proposal Stalls in Statehouse
Illinois Progressive Tax Proposal Stalls in Statehouse
It appears that the progressive tax proposal in Illinois has failed, for now. The progressive tax proposal’s sponsor, Illinois state Senator Don Harmon (D) did not introduce the bill on Tuesday, the last day when it could have been voted on to make the November ballot. While a spokesman for the primary group advocating for a progressive tax called the proposal not making the November ballot “really just a hiccup,” other news outlets have gone farther, saying the proposal was “effectively killed.”
Apparently, while Democrats had a sufficient majority in the Senate and the House to pass the proposal and get it on the ballot without Republicans, several Democrats and all Republicans in the House opposed the progressive income tax, such that the votes weren’t there to pass it. Rather than cast votes for a doomed tax increase in an election year, Democratic leadership elected simply not to call a vote on the proposal at all, much to the chagrin of the progressive tax’s supporters.
The proposal in question today was a constitutional amendment that would have allowed a progressive tax in Illinois, as well as a specific rate structure. I’ve offered a comparison of all the major tax proposals in Illinois before. The final proposal that failed yesterday, and on which advocates of a progressive tax pinned their hopes, was the purple line representing Harmon’s proposal in the graph below.
I wrote several weeks ago that Madigan’s millionaire tax had stalled. With other progressive tax plans now out as well, the debate facing Illinois policymakers is narrowed to two options: maintaining the current law rate of 3.75 percent in 2015, or raising future taxes by making the temporary 5 percent rate permanent (blue and yellow lines below, respectively). Governor Quinn has called for making the 5 percent rate permanent, so doubtless this tax debate will continue well into the election season.
As a reminder, we’ve written extensively on Illinois in the last few months. We found that a move to a more progressive tax code has no association with healthier state finances or lower inequality. Before that, we presented data on the filing structure of Illinois businesses, showing how tax increases, progressive or not, affect the majority of Illinois employers. And all the way back in January, we discussed how a move to higher, more progressive taxes would hurt the state’s business tax climate.
Read more on Illinois here.
Follow Lyman on Twitter.
Get Email Updates from the Tax Foundation
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.
Related State Articles
- Lunch Links: Not So Sweet Soda Taxes Have Multi-City Appeal; Trump Includes Tax Reform in Efforts to Keep Carrier from Bolting; Christie Cites 'Blood Money' Tax Revenue in Shunning Marijuana Legalization for N.J.
- Vigilance and Nimbleness Are Crucial in 2017
- Lunch Links: IRS Regs Could Change in Trump Administration; New Jersey's Bond Rating Lowered Again; Illinois Shortfall Worse Than Expected; Politico Forum Upcoming on Tax Reform
- 1 of 66
- next ›