When Illinois voters head to the polls on Nov. 3, 2020, they will vote on an amendment to the Illinois Constitution which would allow state lawmakers to impose a graduated income tax.

At a November 2019 forum hosted by the Chicago Sun-Times and AARP Illinois, policy experts laid out the pros and cons of Gov. Pritzker’s proposed graduated income tax.

Currently, the state constitution mandates that income tax be levied at a flat rate across all incomes.

Voting ‘yes’ means support for changing to a graduated income tax, and voting ‘no’ signals opposition to a graduated income tax.

But what exactly is a graduated income tax? And how will it affect your taxes? Sun-Times politics reporters Tina Sfondeles and Rachel Hinton put together a guide of everything you need to know before voting on the issue.

What is a graduated income tax?

The specific progressive income tax Gov. J.B. Pritzker has proposed, and which will come before voters in November, would raise taxes only on people who earn $250,000 or more a year — incomes between $250,000 and $500,000 would be taxed at 7.75 percent. It would maintain the current tax rate of 4.95% on incomes between $100,000 and $250,000. And it would reduce the rate on incomes of $100,000 or less.

Income from $500,000 to $1 million would be taxed 7.85 percent and income over $1 million would be taxed 7.99 percent. The corporate tax rate within the package would also be raised to 7.99 percent.

Democrats have said the new personal income tax rates would bring in $3.57 billion, and the new corporate tax rate would bring in $350 million.

The current income tax levied on all taxpayers is 4.95%. The flat tax rate, which has fluctuated over the years, has been part of the Illinois constitution since 1970, a year after income tax was first enacted in Illinois. With a constitutional change, the Pritzker administration estimates that 97% of Illinois residents will see at least a modest decrease in their income taxes.

Why is there a referendum? Why is this coming up for a vote?

The Illinois Constitution lays out the rules for how an amendment introduced in the Legislature can be adopted. To become part of the constitution, a proposed amendment must be approved by either 60 percent of those voting on the question or a majority of those voting in the election.

How do I figure out how much I might pay under a graduated income tax?

Use the state’s calculator linked below to see how much your income taxes might change.

How many states have it?

Thirty-four states have a graduated income tax.

When would the new rates take effect?

The new income tax rates are currently set to go into effect Jan. 1, 2021.

Who stands to benefit?

The money generated from the tax will help pay off the state’s bill backlog which stood at $6.29 billion on Jan. 3 and some middle and low-income taxpayers will see some savings.

Find out how much your income taxes might change under the proposed legislation using the state’s graduated income tax calculator.

History of Income Tax in Illinois

Illinois has collected individual income tax since 1969, when the tax rate was 2.5%.

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Read our previous coverage of the proposed graduated income tax:

Feb. 19, 2020

There’s another budget proposal included in the 2021 budget book and discussed in lawmaker briefings that includes the fictional world of a graduated income tax.

Nov. 5, 2019

The pros and cons of Gov. J.B. Pritzker’s signature issue — a proposed graduated income tax — were discussed and dissected at length during a panel discussion in November.

Oct. 23, 2019

The Governor’s Office of Management and Budget report concluded there are “few alternatives” if the “Fair Tax” amendment isn’t enacted, including a 15% cut to essential services.

Aug. 30, 2019

Fresh off a televised address outlining an $838 million deficit, Mayor Lori Lightfoot said “we can’t keep taxing the hell out of all of our people who make substantial incomes” — despite her previous support of Gov. J.B. Pritzker’s graduated income tax plan.

Aug. 9, 2019

The nature of the levy — progressive income tax versus flat income tax — makes it no harder or easier, politically speaking, to raise taxes on the middle class. But that’s not what progressive-tax opponents want you to hear.

June 5, 2019

Pritzker signed the income tax measure, as well as three budget bills — the operating budget, the revenue for the spending and a budget implementation measure.

May 27, 2019

The move means Illinois voters will decide next year if the state’s flat-tax structure should be removed from the constitution and replaced with a graduated income tax.

April 9, 2019

Illinois Senate Republican Leader Bill Brady, R-Bloomington, said his caucus opposes the changed tax structure because it doesn’t provide middle class protections and opens the door for the “Democratic majority” to alter rates at any time.