Yesterday, Speaker of the Illinois House of Representatives Michael Madigan proposed an amendment to the Illinois Constitution that would create a new 3% tax on incomes over $1,000,000, the revenue from which would be applied to education. The amendment would add Section 11 to Article IX of the Constitution, the article dealing with revenue.
There was discussion last year about the possibility of trying to move Illinois to a progressive or graduated income tax structure. Doing so would require an amendment as Section 3(a) of Article IX currently requires a flat tax for both individuals and corporations in Illinois. The amendment currently proposed does not try to alter the existing tax rates, nor to permit a graduated tax structure, simply to add an additional tax on incomes over the $1 million threshold. The amendment provides that “all revenue collected pursuant to this Section shall be distributed to school districts solely on a per pupil basis.” If passed, the amendment would affect tax years beginning on or after January 1, 2014. Proponents of the amendment say it will raise as much as $1 billion for education funding.
The unmentioned elephant in the room in all of this are the scheduled rate decreases to Illinois’s individual and corporate income tax rates. If no further legislative action is taken, those rates will decline January 1, 2015, from 5% to 3.75% for individuals.
Horowitz Law Offices represents taxpayers before the Illinois Department of Revenue, Internal Revenue Service and the Chicago Board of Finance for a variety of tax matters. You are welcome to contact us at (312) 787-5533 or firstname.lastname@example.org