Many Illinois taxpayers cheered when the 5% surcharge on the state income tax was allowed to expire and rates returned to 3.75%. The question is, “Which taxpayers benefited the most?” The Center for Tax and Budget Accountability (CTBA) did a study and their findings may surprise you. 

The CTBA compared the bottom 60% of taxpayers earning up to $35,000 to the top 11% earning $100,001 to $1,000,000 or more. 

It found that while all income groups experienced the same tax cut, they enjoyed vastly different benefits. The percentage of tax benefits for the $0-$25,000 group was 8.1%; the $25,001-$35,000 group, 5.1%. The percentages for the top 11% of taxpayers was as follows: $100,001-$200,000 – 21.7%; $200,001-$1,000,000 – 19.2%, and $1,000,000 or greater – 13.5%.

Therefore, the bottom 60% of taxpayers received a total 13% tax benefit whereas the top 11% enjoyed a total benefit of 54%.

Lower-income taxpayers were even more disadvantaged when we consider that Illinois spends 9 out of every 10 tax dollars in four areas, i.e. Education (PreK, K-12, Higher education), Health Care (Medicaid, health services for the poor), Human Services (funeral and burial assistance for the needy, services for homeless youth, crises center for rape victims, HIV & Aids treatment, etc., etc.), and Security (state police, prisons, etc.). Less taxes means, of course, a lower level of state services for the indigent.

It would appear that our lower-income citizens suffer a double whammy, i.e. fewer tax benefits from tax cuts and less state services. On the other hand, upper-income taxpayers receive the lion’s share of tax cut benefits and need fewer state services. These are the reasons why the current state tax is so unjust.

Al Popowits

River Forest

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