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Want to know what you would be paying under Gov. J.B. Pritzker’s graduated income tax proposal? The governor released the specifics of his plan Thursday, and, as advertised, it would hit high earners the hardest.
Illinoisans who earn $1,000,000 and up will have to get used to paying 3 percent more of their income in state income taxes under the governor’s just-released proposal – though Pritzker cautions this is his opening plan and negotiations are underway with the General Assembly for a final plan. The current rate is a flat 4.95 percent for everyone, so 97 percent of earners, according to the governor, would actually see a slight cut in their state income taxes.
The new plan would add Illinois to the majority of states that have an income tax. Currently, 34 of 41 states have a graduated tax. Ralph Martire of the Center for Tax and Budget Accountability says Illinois’ proposed rates would compare pretty favorably to neighboring states.
“If you look at Iowa, they have a top rate of 8.9 percent, but it kicks in at a much lower rate of income,” Martire said. “Same with Minnesota, which has the highest rate in the Midwest, 9.85 percent, and that kicks in at $266,000 of income for a married couple filing jointly.”