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 All taxpayers and businesses should be wary of Gov. J.B.
Pritzker’s plan to eliminate the Illinois Constitution’s flat tax protection,
but couples soon to be married might have added concern.
Unlike the federal income tax system, Gov. J.B. Pritzker’s progressive income
tax rates do not differentiate between single and joint filers. That means
couples could see a hefty tax penalty simply for getting married, as their
combined income could push them into a higher bracket.
For example, if two earners each making $145,000 married and reached an adjusted
gross income of $290,000, they would see a $1,061 marriage penalty as opposed to
being single filers. They would also see a $930 tax increase compared to today’s
current flat rate.
 Pritzker’s administration issued a response to a DePaul University professor who
pointed out this problem with his plan, telling political blog Capitol Fax,
“Current Illinois tax code does not distinguish between married and single
filers.” Of course, under a flat tax system, it is unnecessary to distinguish
between married and single filers.
“There’s little to no evidence to support the claim that people base their
decision to marry on tax rates,” Pritzker’s administration added. But the
problem with a marriage penalty does not necessarily have anything to do with
marriage rates. It’s simply unfair to punish families with higher tax bills due
to marriage.
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There’s also evidence that tax policy affects the
labor force participation of mothers with young children who have
previously left the workforce and are weighing whether to go back to
work or stay at home a little longer. Because of this, a high
marriage penalty could result in more women choosing to delay
re-entry into the Illinois workforce, hurting the state’s economy as
a whole.
Of course, the level of Pritzker’s marriage penalty is only
considering his rates as they are currently proposed. But to meet
the governor’s $19 billion in new spending promises, those rates
would need to be increased across the board, with the typical
Illinois family paying $3,500 more in taxes. And as the income tax
rates creep up, so would the marriage penalty.
This is one of several hits Illinois taxpayers will incur if the
fair tax becomes law. Under the proposed rates, about a quarter of
small businesses would see a tax hike – which should concern not
just business owners, but Illinoisans seeking work as small
businesses create nearly two-thirds of the state’s new jobs. The
nonpartisan Tax Foundation has said the fair tax would sink
Illinois’ business tax climate to 48th out of 50 states.
Illinoisans can’t afford this tax hike. Though its moniker implies
fairness, Pritzker’s proposed tax rates are unfair to all
Illinoisans, with working families getting hit with an added
penalty. It’s another way the switch to a graduated income tax is a
bridge to higher taxes.
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