SPRINGFIELD, Ill. (WGEM) -
Not only is there a push to extend the temporary income tax hike in Illinois that's set to expire in January, but some lawmakers want to move away from Illinois' flat tax to what they call a fair tax.
The movement for a progressive, or graduated, income tax in Illinois is moving forward.
"It's not about haves and have-nots," Sen. Don Harmon (D-Oak Park) said. "It's about fairness. This is a fundamental issue of equity."
Just when it seemed a push for a progressive tax was all but dead in the legislature, State Senator Don Harmon and Representative Christian Mitchell have revived the issue with similar bills in their respective chambers to replace Illinois' flat tax.
"We can't lower the tax rate on minimum wage workers or a family making $60,000 without also lowering it on someone making $50 million a year. That's why our hands are tied, that's why we need the fair tax," Harmon said.
A progressive tax charges higher rates at higher income levels, just like the federal income tax. But Kristina Rasmussen with Illinois Policy Institute argues the flat tax already forces people who make more money to pay more.
"Rich people pay a lot more in Illinois because they make more money, conversely poor people pay a lot less because they're making less money," Rasmussen said. "That's the beauty of a flat tax because you pay more as you make more. What they're talking about here is punishing people who get ahead even a little bit."
Harmon claims a progressive tax would instantly provide a tax cut to 94 percent of taxpayers who make under $205,000, that would be the amount where the tax rate would jump to the current five percent level.
The Illinois Policy Institute, a think tank looking to improve the state's economy, opposes a progressive tax saying it would be a job killer.
"The goal should be to grow the number of taxpayers at all levels so that we've got a broader base and then we can have a lower rate on everybody," Rasmussen said.
"So this is good for small business and it's good for the people who shop in small businesses which is good for small businesses," Harmon said.
To change the way Illinois taxes income, it would require a constitutional amendment, approved by voters. But before it can get on the ballot, a three-fifths vote of each chamber of the legislature is required.