The Graduated Income Tax Proposal: An Issue Brief


October 23, 2020

Click here to read the full issue brief.
Click here to read a press release for this issue brief.


More than 50 years after Illinois began taxing residents’ income, voters on November 3, 2020 will decide whether the structure of the income tax should undergo a major change. The issue is highly controversial, and the decision will have a long-lasting impact on the State’s finances and its taxpayers.

Since Illinois’ income tax was adopted in 1969, the State has had a flat income tax. Although tax rates have varied over the years, every taxpayer has paid the same rate, which is currently 4.95% for individuals. That could change due to a proposed constitutional amendment that appears on the November 2020 ballot. For the first time in the State’s history, the measure would permit a graduated tax structure in which higher tax rates are applied at higher income levels.

The graduated tax amendment has been a priority for Governor J.B. Pritzker, who championed the proposal during his 2018 election campaign and has provided most of the funding for pro-amendment ads. Other supporters include labor unions and advocates for low income residents and senior citizens. Opponents of the amendment have been led by prominent corporate executives and business organizations.

Based on the more than $100 million received by political committees on both sides of the issue, experts expect the question to easily set a record for spending on a proposed constitutional amendment in Illinois. Before the graduated tax amendment, a total of $16.8 million was contributed for the five ballot measures in Illinois since 2003 and the most money devoted to a single amendment was $7.1 million in 2014, according to the National Institute on Money in Politics. 

The final decision will be up to Illinois voters. Amending the State’s constitution requires the approval of either 60% of those voting on the question or a majority of those voting in the election. Since these requirements took effect in 1971, voters have approved 14 of the 22 proposed constitutional amendments on the ballot. Of those approved, 10 have passed only because they met the 60% requirement, while the votes on the remaining four met both tests. It has generally been easier to get 60% of the vote on a ballot item because of the significant number of voters who have historically chosen not to vote on amendments.

This report is intended to provide voters with the information needed to make their own decisions on the question. Although the Civic Federation recently took a position against the tax amendment, the report is based on blog posts and other material compiled before that policy decision.

Click here to read the full issue brief.
Click here to read a press release for this issue brief.



Graduated Income Tax Proposal Part I: Why Does Illinois Have a Flat Income Tax?
Graduated Income Tax Proposal Part II: A Guide to the Illinois Plan
Individual Income Tax Structures in Selected States

The Civic Federation extends its thanks to the Taxpayers’ Federation of Illinois for providing permission to reproduce TFI’s sample taxpayer analyses beginning on page 23 of the report.