Illinois residents will soon being voting on whether to amend the state’s Constitution to allow for a progressive income tax, which has been called the “Fair Tax.” Currently in Illinois, millionaires pay the same tax rate as workers earning the minimum wage. This has contributed to rising inequality in Illinois, where top 1 percent now earns 65 times as much ($4.0 million per year) as the average income of the bottom 99 percent of taxpayers ($62,000 per year). The Fair Tax would move Illinois from being one of only 8 states with a flat-rate income tax system to one of the 33 states that have progressive income tax systems.

The Fair Tax would cut income taxes or keep them the same for 97% of Illinois taxpayers and raise more than $3 billion per year for the General Fund. With a Fair Tax, only the 3% of Illinois residents with incomes of $250,000 or more would see their taxes go up. Everyone else earning $250,000 or less per year would see their state income taxes go down. A working family earning $100,000 per year in taxable net income would have their first $10,00 taxed at 4.75% and their next $90,000 taxed at 4.90%, saving $70 per year.

Adopting a progressive tax system would improve Illinois’ finances. The State of Illinois is notorious for facing persistent budget challenges. Now, the novel coronavirus (COVID-19) pandemic has strained state and local budgets even more. With Illinois citizens staying at home to mitigate the spread of the virus, passenger vehicle travel declined by as much as 46% by mid-April and consumer spending declined, resulting in more than 700,000 Illinois workers being unemployed. The Illinois Commission on Government Forecasting and Accountability (COGFA) has found that Illinois’ revenue was down by $1.1 billion (3%) over the previous fiscal year and estimated that total state taxes would fall by $2.6 billion in the current fiscal year. Additionally, local governments in the state are experiencing 20%-30% reductions in revenue, and 47% say they plan to make cuts to municipal services.

The Fair Tax can help Illinois combat the economic hardship caused by the COVID-19 pandemic in two ways. First, the Fair Tax puts more money in the pockets of working-class and middle-class families who need it most. About 40% of those who lost their jobs from the pandemic earn less than $40,000 annually. By making Illinois’ tax code more competitive for middle-class families who drive consumer spending, the progressive income tax would stimulate the economy. Second, by generating over $3 billion in tax revenue, Illinois can balance the budget and restore investor confidence, saving thousands of public sector jobs from impending cuts. Furthermore, the additional tax revenue would also enable the state to boost job-creating investments in public infrastructure, education, health care, and child care. Without federal relief, Illinois needs the Fair Tax now more than ever to rebuild its economy.

The value in a progressive income tax system is that it is based on ability to pay. By asking affluent residents earning more than $250,000 per year to pay their fair share while providing income tax and property tax relief for working families, Illinois can begin to recover from the COVID-19-induced recession. Illinois can also balance the budget and make sound public investments that create jobs and grow the economy for future generations. For Illinois to join the 33 other U.S. states with progressive income taxes, voters should approve the Fair Tax on the ballot this November.