Fiscal And Revenue Reform
continued

••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

Further, most new jobs created in Illinois over the next decade are projected to pay less than the current average, so median personal income will continue to decline as a tax base.

HB174

For these reasons, I support HB 174, which would accomplish the following initiatives:

• A modest, targeted income tax increase;

• Modernization of Illinois’ tax system to expand the state’s sales tax base to include some consumer services (food, drugs, entertainment, etc., but not healthcare, housing or business services), which would help Illinois government perform its stabilizing function during recessions;

• Targeted tax relief to low and middle income families, including relief from property taxes, by doubling the state personal income tax credit that individuals may claim for the local property taxes paid on their principal residence from 5% to 10% (up to $1,500 annually);

• Cutting waste and eliminating bureaucratic inefficiency in government to stretch tax dollars; and

• Implementation of procurement and other process reforms recommended by the Illinois Reform Commission that would reduce corruption and save taxpayers’ money;

Families sending their children to private schools would also get a tuition tax credit of $500-1,000 annually under HB174.

An income tax is the most fair of all taxes because its burden adjusts with the ability to pay.  However, the Illinois constitution mandates a flat tax rate across all income levels, which is regressive.  Absent a constitutional amendment that permits a progressive income tax rate structure, the regressivity of Illinois’ tax code could be addressed by increasing the dollar value of the personal and dependent exemptions for low and middle income taxpayers and reducing them for higher income earners. 

« back continue »