State lawmakers across the country have given their residents permanent tax relief over the last two years. In all, 22 states have cut individual tax rates since 2021 as a result of booming state-government revenues. Michigan is the latest state to cut its income tax, triggered by overflowing coffers. That means every single one of Illinois’ neighbors have cut taxes within the last few years.
Instead of tax cuts for Illinoisans, Sen. Robert Martwick, an ally and surrogate for Gov. J.B. Pritzker, recently filed new legislation calling for a progressive tax scheme – never mind most of the country is moving away from progressive taxes and toward flat structures, and that Illinoisans rejected a similar proposal in a 2020 referendum.
A renewed call for a progressive tax hike is bad news for Illinois in the nationwide competition for people and businesses. We’ve documented in detail how Illinois continues to lose population and businesses to other states. Illinois’ lack of competitiveness is made all the worse as other states make themselves even more attractive through permanent tax cuts.
All of Illinois’ neighbors have made and are making significant moves to lower taxes:
- Iowa passed laws in 2021 and 2022 to accelerate the state’s already-planned move from a progressive tax to a flat tax. The state’s top income tax rate was dropped from 8.53 percent to 6.0 percent in 2023 and Iowa will fully transition to a flat tax rate of just 3.9 percent by 2026.
- Missouri passed a law in 2022 to accelerate the state’s already-planned drop in its income tax rates. The state’s top income tax rate decreased from 5.3 percent to 4.95 percent in 2023. Missouri’s top tax rate is on income above just $8,968 a year, so it’s effectively a flat tax state.
- Indiana passed a law in 2022 that dropped the state’s flat rate from 3.23 percent to 3.15 percent in 2023. The law also requires the rate to fall to 2.9 percent by 2029 if specified financial conditions are met.
- Kentucky passed a law in 2022 that dropped the state’s flat 5.0 percent rate to 4.5 percent in 2023. The law also requires the rate to fall to 4.0 percent in 2024 if specific financial conditions are met.
- Wisconsin passed a law in 2022 that dropped the rate of the state’s 2nd-highest income bracket (income between $24,250 and $266,930) from 6.27 to 5.3 percent.
- Lastly, Michigan’s flat rate of 4.25% is set to fall to 4.05% next month, the result of a 2015 law that requires tax cuts when specific financial conditions are met.
Read more here.
No. Cook County voters want, and voted for more of the same! Higher taxes! Make the RICH pay their fair share.