Illinois voters soundly rejected a progressive state income tax because it was a path to tax retirees. That isn’t stopping state lawmakers from trying again.
By Ravi Mishra | Illinois Policy Institute
Lawmakers introduced a new bill to end Illinois’ long-standing flat income tax and replace it with a progressive structure – a move that could impose taxes on retirees and others.
The move comes as Illinois tax revenues have reached record highs. Illinoisans face some of the nation’s biggest tax burdens.
This isn’t even the legislature’s first progressive tax attempt this year. And for a second time, former Illinois Gov. Pat Quinn is pushing the idea.
Voters statewide rejected a progressive tax because it hands state lawmakers power to set tax rates at whatever they want on whomever they want, including on retirees who are not taxed by the state on their retirement income. Calls for taxing “millionaires” are deceptive bids to go after the income brackets of family farms and small businesses – not penthouse residents.
Plus, after state lawmakers have the power to tax one income group, nothing stops them from adding another, and another, and another. Dividing and conquering avoids the political backlash of raising everyone’s flat tax.
Record revenues driven by tax hikes, not growth
Illinois has collected $54 billion in 2025, marking an 35% increase since 2020. The surge didn’t come from economic growth, but rather from at least 50 tax hikes imposed during Gov. J.B. Pritzker’s administration.
Despite record revenues, Illinois has had among the slowest economic growth in the nation. Since Pritzker’s first term, the state has ranked 45th nationally in economic growth and dead last in the Midwest. High taxes have been a primary driver of stagnation, through discouragement of investment, loss of population and lack of entrepreneurship.
Despite this, lawmakers keep looking towards progressive tax schemes to give themselves more to spend.
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