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leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy
at the federal, state, and global
levels. We are a 501(c)(3) nonprofit
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Twelve Things to Know About the
“Fair Tax for Illinois”
This report was originally published on March 11, 2019, based on the information in
Governor J.B. Pritzker’s “Fair Tax for Illinois” presentation, delivered on March 7, 2019.
The report has been updated to reflect the rates as adopted in Public Act 101-0008,
which will take effect if a constitutional amendment is approved by voters on Election
Day allowing a graduated-rate income tax.
Illinois Gov. J.B. Pritzker (D) has proposed sweeping changes to Illinois’ tax
code, advocating a constitutional amendment to permit a graduated-rate
income tax and proposing a new rate and bracket structure.
In May 2019, the General Assembly passed a joint resolution (SJRCA0001)
referring a constitutional amendment to the November ballot that would
allow a graduated-rate income tax structure.
In June 2019, a law was enacted (Public Act 101-0008) establishing new
individual and corporate income tax rates that would take effect on January
1, 2021, should the proposed constitutional amendment be ratified by voters.
• Under Public Act 101-0008, corporate income would be taxed at 10.49
percent, which would become the second-highest rate in the nation, while
pass-through business income would be taxed at a top rate of 9.49 percent,
the sixth-highest such rate nationwide.
• The proposal diverges sharply from ideal—or even typical—income tax
structure. It omits inflation indexing (resulting in “bracket creep”), creates
a marriage penalty, and includes a recapture provision which su