Pritzker ‘fair tax’ could hike taxes on typical Kane County family by nearly $900

While progressive tax proponents champion the measure as a “tax on the rich,” middle-income families in Kane County could see a significant tax hike under the income tax models praised by Illinois Gov. J.B. Pritzker.

A proposed overhaul of Illinois’ flat income tax could mean a tax hike of $888 for the typical family in Kane County.

Illinois Gov. J.B. Pritzker wants to scrap the state’s constitutionally protected flat tax in favor of a graduated, or “fair,” tax structure. What would that system look like? In his Feb. 20 budget address, Pritzker pointed to Iowa and Wisconsin’s tiered income tax rates as models for Illinois. While Pritzker has framed this system as a “tax on the rich,” middle-income Kane County families would get hit with tax hikes under both models.

The state income tax would increase by $629 on the median Kane County family with two children earning $87,696 if Illinois adopted Wisconsin’s rates. The hike would be $888 if Illinois adopted Iowa’s rates. That family isn’t rich by Kane County standards, they are in the middle and could see a state tax increase of 16 percent or 23 percent under the systems Pritzker admires.

This might come as a rude awakening to Kane County residents, who in 2017 shouldered the largest permanent income tax hike in state history – which itself followed a record income tax hike in 2011. They now pay $3,945 in state income tax.

Pritzker said in his budget address that Illinois “can accomplish” a progressive income tax with “a more competitive rate structure than Wisconsin and Iowa.” But what he means by that is unclear: A recent Tax Foundation study recommended that Wisconsin make its tax code more competitive by exchanging its progressive income tax structure for a flat tax. Both North Carolina and Kentucky have swapped their states’ progressive income tax for a flat tax in recent years. Connecticut is the only state in the past 30 years to add a progressive tax and it seriously damaged their middle class, job market and poverty rates.

While state lawmakers may think an $888 tax hike is “fair,” few Kane County families would agree with them.