Though Gov. J.B. Pritzker has mentioned Wisconsin and Iowa as models for a fairer income tax, the typical family in Godfrey, Illinois, would pay nearly $500 more in taxes each year with either of those states’ income tax rates.
A median income family making $84,782 in Godfrey pays $3,801 under Illinois’ current flat tax. If Illinois adopted Wisconsin’s progressive rate structure, that number would jump by $590. It would jump even higher, by $783, under Iowa’s. Those are increases of 16 percent and 21 percent.
Calling the rate structure a “fair tax,” Pritzker cited these two states in his budget address Feb. 20 as models for Illinois to follow. Specifically, he said Illinois “can accomplish” a progressive income tax with a “more competitive rate structure than Wisconsin and Iowa,” though it’s unclear how he’s defining “competitive.” Middle-income taxpayers in Godfrey and southwestern Illinois are already dealing with high property taxes and a record income tax hike in 2017 that followed a previous record hike in 2011. Those families might not agree that yet another tax hike is either fair or competitive.
Experts second that. A recent Tax Foundation study on Wisconsin’s tax code went so far as to recommend exchanging its progressive income tax for a flat income tax as one way to make the state more competitive. This is a move both North Carolina and Kentucky have made in recent years to be more competitive.
Illinois should not take the opposite approach. Connecticut is the only state in the past 30 years to add a progressive tax and it seriously damaged their middle class, job market and poverty rates.
The fair tax isn’t the only progressive-tax idea floating around in Springfield that should have middle-class taxpayers worried, either. Another progressive income tax proposal introduced in 2018 would raise income taxes on all Illinoisans making just $17,300 a year or more. This is all, again, on top of the largest permanent income tax hike in state history in 2017.
With either proposal, the middle class gets hit hard, despite Pritzker’s fairness rhetoric. Illinois families cannot afford another tax hike, and it certainly wouldn’t be fair to push one on them.