Illinois House Follows Senate's Lead, Approves Proposed Graduated Income Tax Scale

Proponents say it would help relieve the state's debt problems; opponents say it will discourage business expansion and drive some out of the state.

The final word will rest with Illinois voters, who will now consider the question of changing the Illinois Constitution to allow the graduated scale. The state now has a flat income tax rate for every resident of 4.95%. The question will be on the 2020 election ballot.

Under the proposed graduated scale, those with incomes up to $10,000 would have an income tax rate of 4.75%. The rate would jump to 7.75% for those with incomes over $250,000, and top out at 7.99% for single filers earning more than $750,000. The corporate rate would increase from 7% to 7.99%. 

Governor J.B. Pritzker has championed the progressive tax structure, or "fair tax" as he calls it. Pritzker claims the alternative to more revenue is spending cuts or hikes in the flat tax rate. 

The plan also contains a 20% increase in the property tax credit, and increases to the child care tax credit.

Opponents to the plan say the legislature will just spend more if they have more, rather than use additional revenue to pay down the debt.

The House vote was 67-48, mainly along party lines.