|
State Rep. Barbara Hernandez, D-Aurora, and others in the House
Progressive Caucus could see their House Bill 3920 heard in the
Revenue and Finance Committee as soon as Thursday.
If enacted, it would send monthly payments to people with
disabilities worth “1/12 of the applicable annual federal
poverty level for the individual's family size minus the amount
of the individual's monthly federal SSI benefit.”
Those payments would extend to undocumented immigrants who have
a disability and otherwise qualify and the extra benefits
wouldn’t count against any other means tests for other benefits.
The state would pay for the program by adding an additional 5%
on Illinois’ estate tax from 4.95% to 9.95%. That would result
in a top marginal rate of 21% on value over $4 million.
“The top marginal estate tax rate under this proposal would
become the highest in the country at 21%,” Tax Foundation
analyst Katherine Loughead said.
Illinois is one of 12 states that tax the total value of an
estate at the time of the owner’s death. Any estate value over
$4 million would be subject to Illinois’ estate tax.
The tax has been the target of criticism from the business
groups and the Illinois Farm Bureau because estates of small
business owners including farmers can be rich in assets but poor
in cash. Between the market value of land, buildings, livestock,
and machinery, a farm operation of relatively modest means can
quickly qualify for Illinois’ estate tax provision.
Illinois Attorney General Kwame Raoul, who is tasked with
collecting estate taxes, brought in more than $315 million in
2018. The office didn’t release any collection data in 2020.
Loughead said most states with an estate tax have been slowly
phasing them out after the Tax Cuts and Jobs Act of 2017
increased the federal threshold and eventually phases it out
completely in 2025.
“Just a few decades ago, almost every state had either an estate
tax or inheritance tax,” she said. “Now, most states have done
away with those.”
|
|
