Map: Individual income tax rates and structures in 2017

Aug 02, 2017

Infographic shows individual income tax rates and structures by state

In July, the Democrat-led Legislature—with the help of 16 GOP lawmakers—overrode Republican Gov. Bruce Rauner’s vetoes to give Illinois its first state budget in more than two years, along with a permanent increase in both the individual and corporate state income tax rates.

Illinois is one of eight states that levies income taxes at a flat rate, whereas 33 states and the District of Columbia impose a graduated or progressive rate structure where income earned above a certain amount is subject to different rates or tax brackets. Another nine states levy no income tax.

Like federal tax brackets, taxpayers in states with a graduated tax structure pay a certain percentage of their income up to a specific dollar amount, and then any income earned above that set amount is taxed at a higher rate.

For example, if you’re a single filer with no dependents and your federal taxable income in 2017 was $30,000 after adjustments, deductions and exemptions, you would be in the 15 percent tax bracket, though that doesn’t mean you pay 15 percent on all of your income. You would pay 10 percent on income up to $9,325, or $932.50, plus 15 percent on income greater than $9,325 and less than $37,950, which in this example would be $3,101.25. In total, you would owe the federal government $4,033.75 in taxes.

In some states like California, there are as many as 10 different tax brackets, ranging from 1 percent on income up to $8,015 to 13.3 percent on income over $1 million.

But Illinois imposes a flat income tax rate, which recently increased to 4.95 percent from 3.75 percent as part of the state budget that passed by veto override.

Nearly 50 years ago, Illinois enacted its first income tax at a rate of 2.5 percent. As laid out in Article IX, Section 3 of the 1970 Illinois Constitution, the state only can impose income taxes at a flat or non-graduated rate—barring a constitutional amendment.

Although the flat vs. progressive tax debate routinely comes up, the last real attempt to amend the state’s Constitution was in the 2014 election year, when the Senate tabled a resolution introduced by state Sen. Don Harmon, D-Oak Park, to replace the flat tax with a graduated system.

So where does the Illinois income tax fit in the national state income tax picture? Here’s a look. See the table at the bottom of the infographic for tax brackets and income levels other states use to define their progressive tax systems.

Click on the infographic to enlarge




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