Working middle class to see a lower tax bill under IL Gov. Pritzkers new fair tax proposal

97 percent of taxpayers would have a lower tax bill in the fair tax plan

New Illinois "Fair Tax Calculator"

CARBONDALE, IL (KFVS) - Illinois Gov. JB Pritzker unveiled his fair tax plan that he says ensures 97 percent of taxpayers get tax relief and the wealthy pay their fair share.

“As we negotiate this proposal with the General Assembly, and ultimately ask the people of Illinois to decide, my administration is committed to being fully transparent and giving residents the tools they need to understand this proposal," Gov J.B. Pritzker said.

With tax day around the corner, taxpayers are in the mindset of anticipating what they are going to get back.

Jackson Hewitt Tax Services Regional Manager Barbara Holland is optimistic for her clients in Carbondale.

“Over all, I think the majority of them, it will benefit," she said.

Holland says majority of her clients’ income range between $20,000 and $60,000.

“We do have a lot of single moms and single dads that range anywhere from $10-20,000, so a lot of ours would be impacted in a good way.”

On her office computer, Holland tested out the new fair tax calculator with a hypothetical client.

She found out lower income taxpayers will take more money home.

“A single person making $20,000 with two children, their tax would decrease $222 under the fair tax act,” she said.

According to Pritzker’s plan, everyone who earns up to $250,000 will pay the same or less than what they’re paying today.

John Jackson with the Paul Simon Public Policy Institute says in order to keep the government going the state needs to budget and cut the billion dollar deficit.

“The state needs new revenue, and it’s just a question of where are they going to get that new revenue,” Jackson said.

Critics say the math does not add up.

“Gov. Pritzker’s progressive income tax is clearly a bridge to higher taxes," Illinois Policy Institute Chief Economist Orphe Divounguy said. "The math doesn’t add up. Any tax cut Pritzker is selling today will not raise enough revenue. That means a tax hike for the middle class is around the corner – and they can’t afford it.”

However, Jackson said the state needs some type of solution.

“Critics have to come up with where would they get the money, what are they going to do about the budget?,” Jackson questioned.

While lawmakers, work out those details, Holland says those facing a higher tax bill will definitely notice the change.

“That’s a big jump," Holland said. "I mean three percent is a big jump.”

Illinois Policy Institute introduced a five-year plan to balance the budget.

“I would hope for a fair, reasonable, rationale debate based on the facts rather than scare tactics and claims that are not true," Jackson explained, "It’s very difficult to achieve that because taxes are complicated, it’s a very complicated proposal, so it’s easy enough to mischaracterize it.”

35 other states also have scaled-up tax rates for those with higher incomes.

In addition to shifting from a regressive flat tax to a fair tax, Governor Pritzker’s proposal would increase the property tax credit by 20 percent and institute a new $100 per child tax credit.

According to Jackson, the General Assembly would debate Pritzker’s proposal, conduct committee studies and hearings, and would need to make it law by May 2019 in order to have a referendum submitted to voters for the 2020 November elections.

If passed then, it would change Illinois constitution from a flat rate system to graduated income tax system.

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