Illinois has taxed Black and Brown communities $4 billion more than it would have under a graduated income tax.

A study by the Institute on Taxation and Economic Policy explains how over the last 20 years, Illinois’ flat tax system has cost Black and Brown communities $4 billion more than it would have under a graduated income tax

It allowed the state’s highest-income (mostly white) households to pay $27 billion less in taxes.

The current flat tax means that the richest people in the state and the teacher, house maid and laborer all pay the same rate of income.

The November election in Illinois would allow us to vote for a system of progressive taxation. It requires 50% of eligible voters or 60% of those voting to pass.

The latest study from the ITEP demonstrates the basic racist nature of the current flat tax.

Says the ITEP report, “The state has the eighth-most regressive tax system in the nation. It made an ideal case study because Illinois voters on Election Day will decide on the Fair Tax, a ballot measure to amend the state’s constitution to move from a flat personal income tax (everyone pays the same rate) to a graduated personal income tax (the rate increases based on income). The analysis compares relative tax liabilities under the current flat tax rate system to what tax responsibility would have been under the proposed Fair Tax.”

The study examines the long-term effects of the flat tax on the racial wealth gap by looking at 20 years of data on personal income tax collections in Illinois.

In Illinois, if you are earning $21,800 a year you have 85.3 percent of their income post state and local taxes, according to the report. Families with income over $536,4000 keep 92.6 percent of theirs.

The flat tax makes income inequality even wider after taxes are paid.

Households in Black and Brown communities with income under $250,000 paid an additional $4 billion in taxes over 20 years than they would have under the Fair Tax.

That is $4 billion that the rich did not pay. Compounded over time, this effectively enriched the state’s top 3 percent (a majority of whom are white) by an additional $7.5 billion concludes the ITEP study.

4 thoughts on “Illinois has taxed Black and Brown communities $4 billion more than it would have under a graduated income tax.

  1. I sent your article to my financial advisor who works in Illinois. Love to have your comment back.

    Hi Carol,

    Thanks for your comment and we appreciate your contacting us to send your article. What they are saying is correct but they stop right there and bring up nothing else. Making everyone think that makes sense .

    You can go back and listen to what I said. This amendment is all about Trust. Legislators in Illinois over the years have never done what is in the best interest of anyone but themselves

    They Can raise tax rates right now and don’t need to ask anyone. They don’t because they know they will get thrown out of office.

    Remember what I said. By passing the Illinois Constitutional amendment the state would be able to tax anyone anything they want. They could even start taxing residents on their IRA distributions as they pleased.

    We are already the second highest tax rate In the country on property taxes. If passed we would be the second highest business tax in the country. And Cook County later this year will be the highest sales tax in the country.

    We are also #1 in something else also. The #1 state in people Moving Out of a state.

    As for your pension there is no faster way for you to loose it than if this passes in my opinion. The more people that leave the state the less there are left to pay for your pension

    Remember, it is not about what black or brown or white or green people pay in taxes. It is about spending LESS not taxing more.

    Funny your article says nothing about how much blacks, browns, whites, or green people are paying proportionaly for property and sales taxes. That is MUCH more of a problem than the state income tax.

    The new tax will bring in about 3.8 Billion in new taxes. The state in various estimates will be short about $10-$13 Billion short next year and every year thereafter.

    It is estimated that the tax rate on EVERYBODY in the state would have to be around 9% on EVERYBODY to just break even on what they spend. That gives you some idea how bad off the state of Illinois really is.

    If this Amendment was tied to dollar for dollar reductions in property taxes for the poor I would be all for it.

    If it was being done to lower sales taxes on the poor in the state dollar for dollar I would be for it.

    If was to reduce corporate taxes dollar for dollar for those companies that hired the poor I would be all for it.

    This will do none of that.

    So back to trust. The state needs to spend Less not tax more. Passing this amendment just will ultimately make things even worse for people living in the state.

    There just aren’t enough rich people in the state if they taxed them at 15% to pay the bills.

    Look at California. There top rate is going to 16.8% and they are just in as much trouble as Illinois. Didn’t work there and won’t work here.

    Also this is the first year now where more people are moving out of California than moving in. And as you can imagine they are the wealthy moving out not the poor.

    There is a good chance in the future that states like California and Illinois May have to file for some type of bankruptcy if they don’t change their ways.

    Hope this helps and go out and vote this year no matter who it is for.

    Have a good weekend

    1. My suggestion is to change financial advisors.

      They thinks there are green people. That raises serious issues for me.

      They are wrong about population exodus. Recent studies (you do the googling) show no relationship between people leaving the state and tax rates. There are tons of other factors and apply to other states as well.

      IRA distributions that are part of retirement income are not taxed in Illinois. He is a financial advisor and he doesn’t know that? Dump him.

      No retirement income is taxed in Illinois. He doesn’t know that?

      The legislature already can tax at rates they want. The amendment doesn’t set the rates. It ends the practice of flat taxing. A flat tax is a bigger hurt on working people than the rich. A %4.9 rate on someone earning 50K is a bigger hurt than on someone earning $250K. The current law requires the rate to be flat. A new law would allow a graduated rate.

      Property taxes (which retirees pay) are high because the state can’t raise enough revenue with a flat income tax (which retirees don’t pay). So guess whose taxes are higher now? Retirees. Because they are taxed on property if they have some, and local sales taxes. No tax on retirement income.

      Your financial advisor doesn’t know that?

      The amendment doesn’t solve every problem. Corporations and the rich will still have their tax lawyers finding loopholes.

      The amendment change is very targeted and limited. It allows the legislature to enact a graduated income tax so the wealthy can be taxed at a higher rate than a first responder or a teacher.

      Everything else is something else and not on the ballot.

      1. Fred, I sent your comment back to my advisor. I’ll let you know what he says when he comments back to me. [I am not really qualified to give knowledgeable responses and appreciate what you say.] This should be interesting.

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