An Illinois House committee Friday approved legislation setting tax rates that would be charged under a graduated state income tax.
The House Revenue Committee approved the rates on a party-line vote and sent Senate Bill 687 to the full House for a vote.
Rep. Mike Zalewski, D-Riverside, said taxpayers should know what rates would be charged before they are asked to vote on bringing a graduated income tax to Illinois. Republicans had criticized House members for advancing a proposed graduated income tax amendment to the House floor without also dealing with the rates.
“We as a caucus feel like if you don’t do that, then people, voters, next fall won’t have the opportunity to know what they’re voting for,” Zalewski said. “They’ll know that they’re voting to change the Constitution, but they won’t know what their tax bill will look like.”
The House approved the income tax rates that were adopted by the Senate earlier this month. The approved rates that were slightly changed from those originally proposed by Gov. J.B. Pritzker. That opened the door to critics contending middle class taxpayers will end up being hit with higher taxes in the future.
“Since Gov. Pritzker unveiled his graduated rate structure in March, the number of people who would see a tax increase has gone up,” said Andres Nelms of Americans for Prosperity.
He said eventually middle-class taxpayers will likely see a tax increase.
Rep. Steven Reick, R-Woodstock, also said lawmakers eventually will face an “irresistible urge to broaden the base.” He said the highest rates fall on a relatively few taxpayers and a downturn in the economy could prove disastrous to state tax collections. However, Cameron Mock of Pritzker’s budget office said Illinois would have enough money to operate and a graduated tax would allow the state to establish a rainy day fund to cover such problems.
Pritzker has argued that his plan will give tax relief to 97 percent of taxpayers. The proposal also increases the child care tax credit that can be claimed and the property tax credit is increased from 5 percent to 6 percent.
Republicans on the committee contended the plan that raises taxes on those making larger incomes will lead to wealthy taxpayers fleeing the state. However, representatives from Pritzker’s office said studies have shown that isn’t the case and the people migrating out of Illinois are middle income earners in search of better jobs or other reasons.
Although Pritzker’s tax plan increases the property tax credit, many lawmakers have said it doesn’t go far enough. Zalewski said the issue will get further study over the summer.
“I think it’s the intent of the caucuses to try to work toward a summer task force to deal with property tax relief,” he said. “I think what’s been demonstrated this spring is property tax relief cannot really be addressed in the state income tax code. It’s a very hard bridge to gap, so we’re going to try to work on a solution where we address property tax relief.”
No decision has been made when the tax rate bill and the constitutional amendment will come to a vote. The General Assembly is scheduled to adjourn on May 31.
Reporter Cassie Buchman contributed to this story. Contact Doug Finke at email@example.com, (217) 788-1527 or twitter.com/dougfinkesjr.