Tax myth: progressive income taxes reduce the tax burden on middle-and low-income earners

Several special interest groups and lawmakers in Illinois are pushing to increase taxes by swapping out the state’s constitutionally protected flat rate income tax for a progressive income tax. Advocates for the progressive income tax increase are disguising their plan as a tax cut for middle-and low-income earners. But the legislation that’s been proposed thus...

Several special interest groups and lawmakers in Illinois are pushing to increase taxes by swapping out the state’s constitutionally protected flat rate income tax for a progressive income tax. Advocates for the progressive income tax increase are disguising their plan as a tax cut for middle-and low-income earners.

But the legislation that’s been proposed thus far hasn’t included any tax rates. Not including tax rates is a strategic move by lawmakers who want Illinoisans to vote on a progressive tax without telling them how much it would increase their tax bill.

Asking lawmakers to figure out the exact tax rates later on is sort of like buying a car and letting the dealer decide the interest rate, engine size, brand of tires and paint color once you’ve walked off the lot – you never know what you’ll end up paying for.

Fortunately, Illinoisans can look to other states to see how progressive tax structures work.

Progressive taxes don’t reduce taxes on middle-and low-income earners. In fact, progressive income tax structures often have top marginal tax rates that hit middle-and low-income earners. Consider the following examples:

• Georgia has six income tax brackets, the highest being 6 percent on incomes of more than $7,000
• Louisiana has three income tax brackets, the highest being 6 percent on incomes of more than $50,000
• Mississippi has three income tax brackets, the highest being 5 percent on incomes of more than 10,000
• Missouri has 10 income tax brackets, the highest being 6 percent on incomes of more than $9,000
• Montana has seven income tax brackets, the highest being 6.9 percent on incomes of more than $16,400
• Nebraska has four income tax brackets, the highest being 6.84 percent on income of more than $27,000
• Virginia has four income tax brackets, the highest being 5.75 percent on income a of more than $17,000

And a similar story is true across many other progressive income tax states. In fact, 31 of 33 progressive tax states tax the middle class at a higher rate than Illinois’ 2015 rate of 3.75 percent (North Carolina abandoned its progressive income tax for a flat tax earlier this year).

Illinois taxpayers shouldn’t let lawmakers and other high-tax advocates dupe them into thinking a progressive income tax is something it isn’t.  Taxpayers need to continue calling out the progressive income tax for what it is — a tax hike that would hit Illinois’ middle class.