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The Center for Tax and Budget Accountability has a new report out about how a graduated income tax could be used to lower taxes for 98 percent of Illinoisans. Here’s the Tribune…
Under one model, the state would keep its current 4.95 percent rate for income of up to $300,000. It would raise the rate to 7.5 percent for income between $300,000 and $400,000; hike it to 8 percent for income between $400,000 and $500,000; increase it to 9.25 percent for income between $500,000 and $1 million. Income above $1 million would be taxed at 9.85 percent. The top rate is what is used in Minnesota.
In that plan, a $300 credit would be applied to lower incomes, and that amount would get smaller as a taxpayer’s earnings got higher.
A second model from the group would levy a 4.5 percent tax on income up to $100,000; 4.95 percent on income between $100,000 and $300,000; 8 percent on income between $300,000 and $500,000; 9.25 percent on income between $500,000 and $1 million; and 9.85 percent on income of $1 million or more.
The group said under that model, anyone making under $314,000 of taxable income would see a tax cut of up to $450.