ILLINOIS’ DIRE FISCAL CONDITION
Illinois is in precarious fiscal condition, and the state’s financial challenges
are having a destabilizing effect on our economy, businesses, jobs and
the future of working families.
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Multi-billion dollar structural deficit
$15 billion in debt associated with unpaid bills
Late Payment Interest Penalties exceed $1.25 billion from impasse
Public safety, schools and social services were hollowed out
Tens of millions in spending for court orders and consent decrees

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 BASIC OPTIONS FOR ADDRESSING FISCAL
CHALLENGES
Option 1: Across the
Board Cuts
Illinois would cut its
discretionary spending by
15 percent. Discretionary
spending includes:
• K-12 education
• Universities and
community colleges
• State Police
• Social service agencies

Option 2: Flat Tax Increase

Option 3: Fair Income Tax

Illinois would raise the flat
tax rate from 4.95 percent
to 5.95 percent – meaning
that every family in the
state would pay higher
taxes.

Illinois would change its
system so the wealthy
pay more, like in 33 other
states. 97 percent of
taxpayers would have a
lower tax bill, while those
making more than
$250,000 would pay more
and generate $3.4 billion
in additional revenue.

For example, a single
mom making $61,000
would pay an additional
$521 in taxes.

The same single mom
would pay $271 less, a
difference of $792
compared to Option 2.

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 FAIR INCOME TAX PROVIDES TAX RELIEF FOR 97 PERCENT
OF TAXPAYERS
Statewide Impact of Fair Tax
2.7%

% of Filers w/
Tax Decrease
% of Filers w/
Tax Increase

97.3%

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 FAIR INCOME TAX ELEMENTS
• Filers at or below $250,000 – 97% of taxpayers – will have lower tax bill
• See examples on next page
• 20% increase in current Property Tax Credit
• From approx. $500 million (@ 5.0%)to $600 million (@ 6.0%)
• Top rate of 7.95% for net income over $1.0 million
• Once income reaches $1.0 million, entire income is taxed at 7.95% rate
• Corporate Income Tax rate to match top Fair Income Tax rate (7.95%)
• $100 per child Child Tax Credit for:
• Single filers under $80K (phase-out starting @ $40K)
• Joint filers under $100K (phase-out starting @ $60K)

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 FAIR INCOME TAX EXAMPLES – MID & LOW INCOME

Assumptions: Illinois base income is prior to state exemptions and deductions. Income tax relief is the savings after changing the rate
structure. Property tax credit is a 20 percent increase on top of the existing property tax credit. Child tax credit fades out as family income
increases so lower-income people get the most benefit, with a total phase out at $80,000 for single parents and $100,000 for married
couples.

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 FAIR INCOME TAX EXAMPLES – HIGH INCOME

Assumptions: Illinois base income is prior to state exemptions and deductions. Income tax relief is the savings after changing the rate
structure. Property tax credit is a 20 percent increase on top of the existing property tax credit. Child tax credit fades out as family income
increases so lower-income people get the most benefit, with a total phase out at $80,000 for single parents and $100,000 for married
couples.

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 FAIR INCOME TAX RATES
Single & Joint Filers
Marginal
Rates
4.75%
4.90%
4.95%
7.75%
7.85%
7.95%

Net Income Level
$0 - $10,000
$10,001 - $100,000
$100,001 - $250,000
$250,001 - $500,000
$500,001 - $1,000,000
Over $1,000,000

% of IL
Taxpayers
27.2%
58.9%
11.1%
1.9%
0.6%
0.3%

In addition…
97% of earners get tax relief
20% Increase in Property Tax Credits
$100 Per Child Tax Credit

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