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Illinois 2020 Income Tax Amendment: What Is the Truth?

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The Fair Tax versus The Tax Hike

The amendment on the November 2020 ballot in Illinois proposes a change from a flat tax to a graduated tax. Currently, Illinois has a flat tax, which means that all income is taxed at the same rate, currently 5% for people and I think 7% for businesses. If voted in, the amendment to the Illinois constitution would allow multiple tax rates, similar to the way the federal government. The multiple tax rates would be bracketed by income.

People who want the amendment to pass, call it the Fair Tax.

People who don't want the amendment to pass, call it the Tax Hike

Proposed Amendment to the Illinois State Constitution

The proposed amendment grants the State authority to impose higher income tax rates on higher income levels, which is how the federal government and a majority of other states do it. The amendment would remove the portion of the Revenue Article of the Illinois Constitution that is sometimes referred to as the “flat tax,” that requires all taxes on income to be at the same rate. The amendment does not itself change tax rates. It gives the State the ability to impose higher tax rates on those with higher income levels and lower tax rates on those with middle or lower income levels. You are asked to decide whether the proposed amendment should become a part of the Illinois Constitution

How Do Other States Collect Income Tax?

Taken from the Money-Zine website, from the 2020 State Income Tax Rates article. The tax rates across the states are varied. To see the actual rates of each state, check out the article.

    • 7 states that do not collect income taxes: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.
    • 2 states only collect taxes on dividends and interest income: New Hampshire and Tennessee.
    • 8 states have only one income tax bracket (flat tax): Colorado, Illinois, Indiana, Massachusetts, Michigan, North Carolina, Pennsylvania, and Utah.
    • 33 states, the District of Columbia, and the Federal Government have multiple tax income tax brackets.
illinois-tax-change-amendment

False Statements Being Made on Both Sides

It really is too bad that all the information the public is getting is from commercials and literature that comes in the mail.

False statements being made for those AGAINST the amendment:

  • Voting for the amendment raises your taxes. This is false. Voting for the amendment allows the legislature to create tax brackets.
  • Voting for the amendment allows the legislature to raise taxes without your say. This is false. The legislature can raise your taxes without your vote today. They did it when it went from 3% to 5%.
  • Voting for the amendment gives the legislature new powers. This is actually true and false. The inference is that you are voting to allow the legislature to change tax rates. They already have this power. The true part is that it allows the legislature to create multiple tax brackets.

False statements being made for those FOR the amendment:

  • Voting for the amendment will not raise taxes on 97% of Illinois residents. This is false. Like above, the amendment only gives the ability of the legislature to create tax brackets. The legislature would then need to determine what the tax brackets are and only then can they determine what percentage of Illinois residents will be impacted. Governor Pritzker has already signed a bill, Senate Bill 687, that changes the rates if this amendment passes. What makes we the people uneasy is that after this initial bill passes, the legislature can continue to change the rates and who is impacted by those rates. Given that the government led by Mike Madigan has put Illinois into the current financial crisis, it's hard to give them more power.
  • Voting for the amendment will only increase taxes on those who make more than $250,000 a year. This is false. Like the above statement, the amendment only gives the ability of the legislature to create tax brackets. The promise that is will only be on those that make a certain amount is not part of the amendment.

Taxes Will Go Up In Illinois

Regardless of whether the amendment passes or not, the state of Illinois needs to generate more income. The only way they can do that is to raise taxes, which means, the flat tax will probably go up if the Illinois tax amendment doesn't pass.

What Can You Do?

Unfortunately, there isn't much as the dire position our state government has put us in by the way they are fiscally running the state. In good times, you should raise taxes to gather more income, so that in bad times, you can lower taxes to give everyone a break. Most of our federal and state government, can only spend. So what can you do?

  • People again the tax amendment say we can't trust the politicians. If you believe you can't trust them, then, you should VOTE THEM OUT!!!
  • People for the tax amendment say the old way is inadequate because it doesn't properly fund public services. If they can't figure out how to fund public services, then you should VOTE THEM OUT!!!
  • People for the tax amendment say the $3 Billion dollars raised can help responsibly pay the state's bills. HUH? If your politician can't figure out how to do this, like every Illinois resident, then your politician should be VOTED OUT OF OFFICE!!!

What is Fair?

Fair will always be relative to your situation. If your taxes will be lower, then that seems fair, but not to the person whose taxes are higher. If everyone's taxes are raised by the same percentage, that seems fair, but not to the family who could use the extra $200 a year to pay for rent.

To say one way is more fair than another is irresponsible by our politicians.

How Should I Vote?

I can't tell you how to vote. All I can do is lay out the facts and let you make the decision. Does this open up the legislature to becoming tax crazy and just raise. Yes. Does this lessen the burden on the Illinois government to not spend as much? Yes, it does that too.

Will your taxes go up? Yes, absolutely they will whether this amendment passes or not.