Gov. Quinn's 2009 Illinois Tax Proposal Summary
Will be updated soon with Gov. Quinn's 2010 tax proposal.
Governor Quinn's Proposed New Revenue Sources:
- Individual Income Tax - $2.8 billion
- Corporate Income Tax - $350 million
Individual Income Tax
Governor Quinn is proposing to raise $2.8 billion in new revenue from the Individual Income Tax, and has said he wants to take this opportunity to reform the income tax system. The result of the tax reform will cause some taxpayers at higher income to see their income taxes increase, and some taxpayers at lower income to see their income taxes decrease.| Current | Quinn Proposal |
| 3% on Adjusted Gross Income | 4.5% on Adjusted Gross Income |
| $2,000 exemption / family member | $6,000 exemption / family member |
What does this mean?
This means that the income tax will become more "progressive." In effect, with the exception of an individual taxpayer with no dependents, every taxpayer's income they earn up to around the poverty line is tax free. The dependent exemptions favor larger families with many dependents - so it takes into account the additional spending needs required for taking care of a family.
Example:
- 1 individual: $6,000 tax free (Federal Poverty Level is $10,830)
- 2 family members: $12,000 tax free (Federal Poverty Level is $14,570)
- 3 family members: $18,000 tax free (Federal Poverty Level is $18,310)
- 4 family members: $24,000 tax free (Federal Poverty Level is $22,050)
- 5 family members: $30,000 tax free (Federal Poverty Level is $25,790)
About that "50%" increase
As the graph below will show you, the much-balleyhooed "50%" tax increase fails to ring true. We found this out when looking at what the Effective tax rate is currently, versus what it would be under Gov. Quinn's plan. As you see, the tax increase tops out at about 20% for anyone a family of 4 that could consider themselves middle class.
Effective Tax Rates
We have received many questions about how we put together the graph above of the comparison of effective tax rates by income level. This graph shows a direct comparison of the effective tax rates under the current tax system (Red) and the effective tax rates under Gov. Quinn's proposal (Blue). While some groups are claiming that Quinn's proposal is not a "progressive" tax structure because it allows the very wealthy to benefit from the standard exemptions, this chart clearly shows that Quinn's proposal would be far more progressive than the current system. When those groups propose alternatives, we will chart them all together to compare.
Illinois Tax Revenue Plummets
|
|
Actual FY2007 |
Actual FY2008 |
Estimated FY2009 |
Projected FY2010 |
CHANGE SINCE FY2008 |
|
State Sources: Revenues (In
millions) |
|
|
|||
|
Income
Taxes |
$11,159 |
$12,180 |
$10,867 |
$9,968 |
-$2,212 |
|
Individual
|
$9,409 |
$10,320 |
$9,417 |
$8,925 |
-$1,395 |
|
Corporate
|
$1,750 |
$1,860 |
$1,450 |
$1,043 |
-$817 |
|
Sales
Taxes |
$7,136 |
$7,215 |
$6,674 |
$6,394 |
-$821 |
|
Public
Utility Taxes |
$1,130 |
$1,157 |
$1,159 |
$1,150 |
-$7 |
|
Cigarette
Taxes |
$349 |
$350 |
$350 |
$350 |
$0 |
|
Liquor Gallonage Taxes |
$156 |
$158 |
$161 |
$161 |
$3 |
|
Inheritance
Tax |
$264 |
$373 |
$275 |
$275 |
-$98 |
|
Insurances
Tax and Fees |
$310 |
$299 |
$325 |
$325 |
$26 |
|
Corporate
Franchise Taxes and Fees |
$193 |
$225 |
$205 |
$205 |
-$20 |
|
Interest
on State Funds and Investments |
$204 |
$212 |
$80 |
$80 |
-$132 |
|
|
$307 |
$302 |
$253 |
$240 |
-$62 |
|
Other
State Sources |
$482 |
$475 |
$452 |
$430 |
-$45 |
|
|
$21,690 |
$22,946 |
$20,801 |
$19,578 |
-$3,368 |