Cash-strapped Illinois is one step closer to passing a new income tax with the potential to seriously accelerate the exodus of high-earning taxpayers from the most financially dysfunctional state in America.
Lawmakers in the Illinois House of Representatives on Monday approved a constitutional amendment aiming to get rid of the state’s flat income tax, clearing the way for the amendment to be included on the November 2020 ballot for ratification by the voters.Governor JB Pritzker is widely expected to sign it the amendment, which has already been passed by the State Senate.
According to the Democrats who backed it, the tax will help fix the state’s recurring deficits by creating a sorely needed new revenue source: The higher taxes on those earning more than $250,000 would raise more than $3 billion annually while leaving taxes on 97% of the state’s residents unchanged.
There’s no question that more revenue (or, perhaps, less spending) is badly needed. Chronic budget shortfalls, drastically underfunded pensions (to the tune of $134 billion) and $7 billion in unpaid bills have left Illinois’ finances in terrible shape. Illinois’ credit rating being pushed to one level above junk, the lowest in the country, Bloomberg reports. – read more