Tax Rates for Proposed Graduated Scale Ok’s by Illinois House
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Illinois House has approved the tiered income-tax rates. This would take effect if the voters opt for revamping state taxation to hit higher incomes harder. This tax-hike is aimed for giving support to the crippling debt of the state. The house is controlled by the Democrats and the Republicans have criticized the tax hikes.
Despite the criticism, the proposal was approved 67-48. It is said that this plan is not the true essence of what Gov. Pritzker had promised but this will control the runaway government spending. However, it is a rendition of what Pritzker had promised to change when coming into power. The vote had come on the second-last day of the General Assembly’s spring session. The plan would replace the current 4.95% flat rate with a progressive scale topping out at 7.99% for the wealthiest residents of Illinois.
Pritzker says that this change will bring about $3.4 billion in annual revenue. But this will take effect in 2021 if the voters approve it in next year’s election. The current law stipulates a fixed income tax rate. Rep. Michael Zalewski, a Riverside Democrat is one of those representatives that have supported the plan. He says, “This rate structure would raise the appropriate amount of revenue to pay our bills … and set the state on a more stable financial course.”
A vote on Thursday voted on the income threshold for the tax implementation. People with $10,000 income would pay 4.75% while it would 7.75% with people whose income is over $250,000. It would top out at 7.99% for single filers earning more than $750,000. The corporate rate would increase from 7% to 7.99%.
Pritzker says that 97% of Illinoisans will not be affected as they earn below $250,000 and pay at most 4.95. However, many Republicans have criticized this move and labeled it as giving falsehoods to the people.
