Crystal Lake Chamber of Commerce – Vote NO on the Progressive Income Tax Amendment (“Fair Tax”)
The Progressive Income Tax Amendment (“Fair Tax”) will be devasting to local business owners, workers, and Illinois economic growth. The Crystal Lake Chamber of Commerce has joined a number of Illinois Chambers and other organizations Opposing the Progressive Income Tax Amendment (also known as “Fair Tax”). Noted on our Chamber’s Coalition official website https://chambersagainsttax.com/crystal-lake/, the following are some basic facts we think you should know:
The Illinois Constitution currently requires a flat state income tax which means all individuals pay the same rate, currently 4.95%, and all corporations pay the same rate, currently 7%. A graduated income tax allows legislators to determine different rates for both individuals and corporations based on income earned.
In May 2019, the legislature approved a ballot referendum question calling for a constitutional amendment to change Illinois’ constitution from a flat income tax to a progressive income tax. As a result, voters will be asked in the upcoming 2020 election whether Illinois should amend the constitution to move from a flat tax income to a progressive income tax.
The amendment also repeals a critical taxpayer protection: the constitutional ban of more than a single tax on income. Future general assemblies will be allowed to tax the same dollar of income over and over.
Although the ballot question does not contain the new tax brackets, a separate piece of legislation establishing the rates under a progressive income tax system was approved by both Houses in the General Assembly and signed by the governor. Under the proposal, corporate income would be taxed at flat rate of 10.49%, the third-highest rate in the nation, while the highest bracket for pass-through business income would be taxed at 9.49%, the fourth highest in the nation. These rates will only go into effect if the voters approve the ballot referendum question.
When you go to the Polls this November, you will be asked to vote Yes or No on the “Fair Tax” Amendment. Here is how the question reads on the official ballot:
Proposed Amendment to the 1970 Illinois Constitution
The proposed amendment grants the State authority to impose higher income tax rates on higher income levels, which is how the federal government and a majority of other states do it. The amendment would remove the portion of the Revenue Article of the Illinois Constitution that is sometimes referred to as the "flat tax," that requires all taxes on income to be at the same rate. The amendment does not itself change tax rates. It gives the State the ability to impose higher tax rates on those with higher income levels and lower income tax rates on those with middle- or lower-income levels. You are asked to decide whether the proposed amendment should become a part of the Illinois Constitution. Yes or No
Here is how the language in the Illinois Constitution would change based on the passing of the Progressive Tax Amendment:
Constitutional changes The measure would amend Section 3 of Article IX of the Illinois Constitution. The following underlined text would be added, and struck-through text would be deleted:
Section 3. Limitations on Income Taxation. (a) A tax on or measured by income shall be at a non-graduated rate. At any one time there may be no more than one such tax imposed by the State for State purposes on individuals and one such tax so imposed on corporations. The General Assembly shall provide by law for the rate or rates of any tax on or measured by income imposed by the State. In any such tax imposed upon corporations the highest rate shall not exceed the highest rate imposed on individuals by more than a ratio of 8 to 5. (b) Laws imposing taxes on or measured by income may adopt by reference provisions of the laws and regulations of the United States, as they then exist or thereafter may be changed, for the purpose of arriving at the amount of income upon which the tax is imposed.
Besides providing vast new taxing power for the state, the amendment removes the provision preventing multiple income taxes on one dollar of income. The Crystal Lake Chamber of Commerce opposes any proposed tax amendment that increases the state tax burden on local businesses. Accordingly, we have been talking about this with our members, community, and the media, encouraging everyone to take a closer look at this deceptive and destructive amendment.