SPRINGFIELD, Ill. (WAND) - Lawmakers announced a resolution Monday to withdraw a $3.7 billion progressive income tax hike from the Nov. 3, 2020 ballot.
Illinois House Republican Leader Jim Durkin and Illinois Senate Republican Leader Bill Brady introduced the resolution to remove from the ballot.
The measure would ask voters to scrap the state’s flat income tax for a graduated one. The accompanying Senate Bill 687, also passed during the last legislative session, would implement introductory tax rates ranging from 4.75% to 7.99% starting Jan. 1, 2021.
Illinois Policy Institute pointed to the fact that small businesses and households have been significantly impacted financially by the COVID-19 pandemic.
Some lawmakers said a progressive income tax would exacerbate the economic downturn people are already enduring.
Illinois Policy Institute research shows more than 100,000 small businesses, which file as “pass-through” entities, would see tax hikes of up to 47% under the current proposed progressive income tax.
Small businesses are responsible for 60% of all new jobs in the state each year.
Illinois Policy Institute said small businesses organized as C-corps would face an initial 10% income tax hike, bringing Illinois’ corporate income taxes to the third-highest in the nation.
Corporate income taxes could increase to the highest in the nation at 15.28%.
The typical Illinois family would have to pay anywhere between $286 and $1,056 more under a progressive income tax if lawmakers rely solely on increased revenue to offset income tax revenue losses from the COVID-19 outbreak, the Illinois Policy Institute said.