By Ben VanMetre -
State Rep. Naomi Jakobsson, D-Urbana, recently revealed a new progressive tax proposal with rates that hit Illinois’ middle and working classes hard.
Under current Illinois law, the individual income tax rate will be 3.75% in 2015. Under Jakobsson’s new plan, however, a higher 4% rate kicks in for people earning just $18,000. That income tax rate targets Illinois’ working class.
But Jakobsson’s progressive tax rates attack the middle class as well. Her 5% tax rate applies to people earning just $36,000. When an Illinoisan earns more than $58,000, Jakobsson’s tax rates jump to 6%, and again to 7% on income earned after $95,000 — nearly double the rate Illinoisans will pay in 2015.
It’s no surprise that Jakobsson’s progressive tax hike proposal targets the middle class — it’s how progressive income taxes work. That’s where a lot of the money is.
Just look at where the top progressive tax rates — the rates that are supposed to “make the rich pay their fair share” – start in other states.
In Georgia, the top tax rate of 6% is applied to all income earned above $7,000. In Idaho, the top rate of 7.4% kicks in at $10,350. And in Maine, the top rate of 6.84% starts at $20,900.
So don’t be fooled when lawmakers say a progressive income tax will only affect high-income earners. The newly proposed rates in Illinois make it clear that lawmakers are gearing up to raise tax rates on Illinois’ working- and middle-class residents.
Ben VanMetre is Senior Budget and Tax Policy Analyst at the Illinois Policy Institute