Study finds tax plan would narrow state's income gap
A graduated income tax could narrow Illinois’ growing income disparity, cut property — as well as income — tax bills and deliver billions of dollars in extra annual revenue to combat state deficits and underfunded public schools and infrastructure, a study to be released Monday shows.
The peer-reviewed exam by the Project for Middle Class Renewa l and the Illinois Economic Policy Institute constructed eight scenarios based partly on progressive income tax structures among Illinois neighbors. The Associated Press obtained the study in advance of its Monday release.
Gov. J.B. Pritzker has proposed changing the state’s flat-rate income tax system, in which everyone pays 4.95 percent, to a progressive structure in which wealthier residents pay a higher percentage. It would start at 4.75 percent for the lowest wage earners, remain at 4.95 percent for those earning $100,000 to $250,000, and top out at 7.95 percent for incomes over $1 million.
Authors Robert Bruno and Frank Manzo constructed eight scenarios, drawn in part from graduated tax structures in nearby states such as Iowa and Minnesota, and tested each against five public policy goals: Cutting taxes for at least two-thirds of taxpayers, reducing property taxes by 10 percent, protecting small businesses, wiping out Illinois’ built-in $1.2 billion “structural” deficit, and boosting education and brick-and-mortar funding by hundreds of millions of dollars.
Read more: https://www.sj-r.com/news/20190331/study-finds-tax-plan-would-narrow-states-income-gap