SPRINGFIELD—Today the rates for the graduated income tax were presented through SB687 in the House of Representatives. The new tax brackets would include a top tax rate of 7.99% for single filers with more than $750,000 in income and couples generating more than $1 million. Any income over $250,000 would use a tax rate of 7.75% and would increase to 7.85% for income over $350,000 for single filers and $500,000 for couples.
The tax increase is slated to generated $3.5 billion in new revenue for the State. Yet as Representative Mark Batinick (R-Plainfield) argued today on the House floor, this revenue would seemingly not be applied to the state’s outstanding pension obligations.
“We’ve opened up over three billion dollars without doing any real reforms, without doing anything with our budget. But yet we need the money from this tax increase. Where is that money going to go? The way to fix the pensions is to actually fund them. We need to put that money into the pension system and not skip payments. All together with the windfall from the federal level, almost 7 billion dollars in revenue is being squandered. With this plan, it’s like a young kid hit the lottery and went to Vegas.”
The Representative also raised concerns with the lack of guarantee included in this legislation, or in the constitutional amendment (SJRCA1) that would remove the flat tax from the constitution, that these rates would remain.
“We’re supposed to trust that these rates aren’t going to change,” said Batinick. “This isn’t an honest or serious way to help the middle class. We are setting them up for failure.”
The given tax rates would be applied on January 1, 2021, but is contingent upon SJRCA 1 passing both chambers and being approved by voters in November of 2020.