With new Illinois Governor Patrick Quinn promising a “fairer Illinois tax code” in the future, Heartland policy advisor John Skorburg explains why the state income tax is already a fair one.
A flat tax is a fair tax and here’s why:
Assume that Mr. A earns $5,000 in wages in Illinois. At a 3% flat rate income tax, he would pay $150 into the state coffers.
Assume that Mrs. B earns $50,000 in wages and is also a state of Illinois resident. At the same 3% flat rate income tax, she would pay $1,500 to the state in taxes.
So is a flat rate fair? Sure it is! Mrs. B makes 10 times more money than Mr. A, and she also pays to the state 10 times more in state income tax.
What could be simpler and fairer than that?
And what if ….. Ms. C comes into Illinois, opens a new business and earns $1 million in personal income. She would pay into the state dept. of revenue an impressive $30,000 at a flat 3% income tax rate.
I repeat, what could be simpler and fairer than that?
Taking this example one step further ….. Let’s assume that our economy includes only these three taxpayers.
The total income tax revenue would be $31,650. Mr. A would have paid-in 0.5% of the total revenues, Mrs. B would have paid-in 5.0%, and our millionaire Ms. C would have paid-in the remaining 94.5% of total tax revenues!
A flat rate state income tax is already fair……….
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