Illinois House Speaker Michael Madigan proposed a plan last week which would impose a tax surcharge on millionaires living in Illinois.
The proposal would enact a 3 percent surcharge on citizens earning over a certain threshold, Rachel Bold, Illinois General Assembly senate republican staff member, said. In this case, the citizens would be millionaires, according to a statement made by Sen. Bill Brady.
A surcharge is defined as a fee or other charge added to the cost of a good or service. Typically, a surcharge is added to an existing tax, and may not be included in the stated price of a good or service.
Illinois has a 5 percent flat rate income tax on all citizens. Thus, the surcharge would effectively increase a person who made over a million dollars income tax to 8 percent.
The name of the legislation is titled HJR CA51.
The CA in the legislation stands for constitutional amendment because for the surcharge to go into effective, this is exactly what would need to ensue. According to HJR CA51, the legislation would need to amend the Revenue Article of the Illinois Constitution which provides that an additional income tax shall be imposed on individuals.
The new legislation would fall under Article IX or the Revenue portion of the Illinois constitution. It would be an additional section titled, Section 11: Tax for Education.
The total amount of the revenue collected from the tax will be distributed to school districts on a per pupil basis allocated by the General Assembly, according to a statement by Sen. Brady.
The estimated per student amount would equate to $550.
The total earnings per year if the surcharge was implemented would be over $1 billion, according to HJR CA51.
On the other hand, the proposal of this new surcharge is still in the rudimentary phases if it set to become a reality.
“The plan is still within the House and hasn’t made its way to the Senate yet,” Bold said.
A negative aspect associated with the surcharge could be citizens above the threshold of million dollars leaving Illinois for states with lower taxes on this specific income bracket, according to a statement made by Sen. Brady.
The most current news on this proposed amendment to enact a surcharge occurred on March 27.
The House Revenue and Finance Committee’s 6-4 vote in favor of the Democratic House Speaker Madigan’s proposed constitutional amendment.
The next step for the amendment would be for it to be approved by a supermajority in both chambers of the Legislature before securing a spot on the November ballot.