By: Ted Dabrowski and John Klingner
The push for a progressive tax is back in Illinois, just four years after being rejected soundly by voters. Its proponents say Illinois needs a more “modern” taxation scheme. That we need a “fair” tax. That we need “progress.”
Those arguments fall flat given what’s happening across the country. Since 2022 alone, eight states have dumped progressive tax schemes in favor of flat tax rates, with Louisiana joining the list just last month. The Pelican State dropped its three-rate progressive structure in favor of a flat 3% going forward. The other seven states to move to a flat tax since 2022 are North Carolina, Kentucky, Mississippi, Arizona, Idaho, Georgia, and Iowa.
Massachusetts (2023) was the lone state to move the other way, becoming the only state to adopt a progressive tax since Connecticut did nearly three decades ago.
The move to flat income tax structures reflects the effort by states to become more competitive economically as well as to offer tax relief to its residents. Some states go even further and refuse to tax incomes at all. Nine states now have zero income tax rates, including high-GDP growth states Florida, Texas, and Tennessee.
Given Illinois’ worsening economic, fiscal and demographic position nationally, any ideas of a move to a progressive tax must be soundly rejected once again by its residents.
The “flattening” of income taxes goes beyond just flat tax states. Many progressive tax states are decreasing their number of brackets in an effort to simplify their tax structure. Most notable is Ohio, which once boasted nine tax brackets in 2010. It’s now down to just two brackets, both with rates below 3.5%. It’s effectively become a flat-tax state.
And other states, like neighboring Missouri, are also practically flat tax states. The Show-Me state applies its top income tax rate of 4.7% to all income above just $8,911. That’s even lower than Illinois’ flat tax rate of 4.95%.
The move by other states toward flat and flatter tax structures is a real problem competitively for Illinois. Illinois’ flat income tax has historically been the state’s only tax-positive feature, considering it’s home to the nation’s highest property tax rates and the 2nd-highest gas taxes. Whatever advantage Illinois has had from its flat tax is being eroded as more and more states go flat.
That’s particularly true at Illinois’ own borders. Indiana has dropped its flat tax rate to 3.0%. Kentucky’s flat rate is down to 4.0%. Michigan is at 4.25%. Iowa has its new flat tax at 3.8%. Even progressive-tax Wisconsin has been lowering its rates, increasing its competitiveness.
Lower tax rates across the country are also making Illinois’ push for higher taxes an absurdity. As we wrote last year, 25 states made permanent income tax cuts between 2021 and 2023 (Michigan reversed its cut in 2024).
Why push now?
Since Gov. J.B. Pritzker took office in 2019, Illinois ranks fourth-worst nationally for economic growth and third-worst for population growth. Illinois also continues to have the nation’s bottom-of-the-barrel credit rating. Not to mention, Illinois’ overall combined state and local tax rate is already the nation’s seventh-highest. Illinois is super uncompetitive in virtually all fiscal, economic and demographic measures that matter.
Which begs the question, why another push for higher taxes and a progressive tax scheme?
A look at the Gov. Pritzker’s recent budget projection provides the answer. His office is now predicting $23 billion in deficits over the next five years, a dramatic departure from his recent celebrations of “balanced budgets” and economic improvements.
Lawmakers are desperate to continue the massive spending that began as a result of federal government’s covid aid. Now that the covid money has run dry, they are seeking new revenue to fuel the bigger government they’ve created.
Now it’s a “surcharge”
The latest progressive tax scheme proposal was a “surcharge” on millionaires, with the added sweetener of potential property tax relief. The proposal was a non-binding referendum on the November ballot, and 60% of Illinoisans ended up voting in favor of the tax.
That result has politicians like former Gov Pat Quinn convinced Illinois is ready for a progressive structure. But there is a very big difference between Illinoisans voting on a non-binding referendum that promises property tax relief and an actual constitutional amendment authorizing a progressive tax.
Given Illinois’ fiscal mess, the reality is any progressive tax income would likely be swallowed by deficits and Illinoisans would get zero-to-little property tax relief.
Illinoisans saw through politicians’ false promises in 2020, and they should do so again. They don’t need to pour even more money into an already-bloated state government.
What Illinoisans need instead is tax relief – like most of the rest of the country is getting.
Read more from Wirepoints:
- Illinoisans should watch out for the next try at a progressive income tax on the November ballot
- Don’t fall for the “progressive-income-tax-for-property-tax-relief” tax swap referendum
- Illinois’ only redeeming tax feature is being rapidly worn down
- 22 states, including every Illinois neighbor, cut income taxes permanently. But not Illinois.
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Across the board % tax is not a flat tax. A flat tax makes everyone pay the same. A Flat % Tax (as in Illinois) is just that. People who make more pay proportionately more- they do not pay the SAME in taxes.
The liberal media has been brainwashing lefties for decades. As a result you get people that feel the deck is perpetually stacked against them and who repeat the BS they’ve been spoonfed. The Trump tax cuts reduced brackets across the board and doubled the standard deduction while eliminating deductions that favored the wealthy, and the liberal media labeled it a tax cut for the rich.
Don’t listen to them. Pritzker has it all figured out. Keep that accelerator smashed to the floor. That cliff you see fast approaching is a mirage. Go for broke. Show us how you libfilth have it all figured out.
Tax the rich and you soon will have less rich to tax. It is really pretty simple.
Very, very often there is a single Thumbs Down vote posted to comments. That is just fine because I do not wan this site to become like CapitolFax where Rich Miller bans any comment he does not like.
However, since there is such a constant single TD it would be respectful if that person(s) would give a reason for their TD. Not too much to ask! And yes, I personally post on liberal sites where I get- which doe snot bohter me one bit.flack
I agree. I am all for an open discourse but the thumbs down trolls don’t have the stones to debate because they argue with feelings instead of knowledge, logic and common sense. It is easier to click a thumbs down for them.
I would like to see those that vote TU or TD have their login name listed and see if the TD is just the same few frequent flyers.
They don’t have to give real names like I do, but they should respond instead of being strictly negative.
Again a lot of TD’s but still no real response. Says it all!
The lack of a response by those who do the TD’s says it all!
Ahhh, look! Ten little cowards down voted my comment…and proved me right. LOL!!!
Rule #1: Don’t trust Illinois politicians. For all other rules, see Rule #1.
scheme: A plan of action, especially one that is secret or crafty.
Describes anything coming out of Springfield. Millionaire’s tax, ha! How soon will they end up chasing enough “millionaires” out of the state and then anyone making over $50k suddenly finds themselves the new millionaires?
What’s missing, of course, is any discussion on cutting back on spending. The entire focus of the Illinois government is to see where additional tax revenue may be raised when it should be looking at ways to trim expenses. Of course, we all know that this will never happen.
Exactly, the state ,just like Chicago, is going to try and make all the $billions$ in ARPA-COVID spending PERMANENT in future budgets to be paid somehow by dopey taxpayer/homeowners. With vast majority of increased spending going into the pockets of are upper-middle-class public sec hero class…all of which will require way more than Pat Q’s “millionare tax”. Look for taxes on services, retirements, etc…tax, tax, tax$$$$$..it would be interesting WP research to know if other states are cutting back budgets after all the ARPA-COVID spending bonanza is over, or trying to follow Illinois into oblivion…all on the taxpayers dime
The pols are selling “millionaire tax” or other progressive tax schemes as if they will offer property tax relief. But there will be now relief, no cuts, no exchange of revenue. They could propose cap or limit on prop taxes in exchange for progressive tax or some type of exchange in rates but that will never happen. Just MORE tax, tax, tax, tax to feed beast of the upper-income public sec class.
Ohio also has city income taxes of about 2% and Indiana has county income taxes which can really drive the tax burden up there. https://www.in.gov/dor/files/2022-county-tax-rates-and-codes.pdf
Good idea. If Chicago residents elect politicians that want to continue ridiculous levels of spending, don’t look to the state to cover it. Own it, and implement an income tax in the city.
Many many Illinois counties have added a 1% tax for ‘school funding” also
If I’m not mistaken the Indiana county taxes were implemented in “exchange” for lowering property taxes but not addition to as another tax. Property taxes were out of control there and people were fed up and voted in change.
Do you know the end result?
Seems like a mixed bag. Sales tax went up but property tax went down. With a sales tax we at least have a choice on what and where to buy. Here is some info on the history of property taxes in Indiana. Regardless we desperately need some tax relief especially for seniors who do not need the public school system which consumes 60% of our tax bill. As least Indiana lawmakers are trying to fix the system unlike ours pols.
https://www.wthitv.com/how-did-we-get-here-historical-analysis-of-indiana-property-tax-reform-seeks-answers/article_c37c7e2e-7fed-11ef-bc43-a726d5b5cdf0.html
https://www.insideindianabusiness.com/articles/legislature-backtracks-offers-property-tax-relief
Thanks for the response.
Your Welcome!