New Study Shows Recent Tax Rollbacks Worsens Income Inequality
While the Illinois’s budget shortfall is well known where these dollars are going has been unexamined, until now.
Today, State Senator Heather Steans (D-7), Ralph Martire of the Center for Tax and Budget Accountability (CTBA), William McNary of Citizen Action/Illinois and Dan Lesser of the Sargent Shriver National Center for Poverty Law held a news conference in the State Capitol press room to release a new CTBA analysis of state tax return data.
The study reveals that Illinois's wealthiest income earners will benefit disproportionately if the 2014 state income tax rates are not restored, worsening income inequality and failing to stimulate the state's economy.
“We’ve given a massive windfall to those needing it the least while defunding public services to those who need them the most” said William McNary, Co-director Citizen Action/Illinois. “We need a fair, responsible budget with adequate revenues and no more cuts in the vital services that have already been severely slashed repeatedly in recent years.”
Link to report: CTBA report
Since the expiration of 2014 income tax rates, the top 3% of the state's wealthiest earners -- those with incomes over $200,000 -- are getting almost 33% of the benefit (more than $1.2 billion).
Tax benefits are going disproportionately to the wealthy few -- NOT working and middle-class taxpayers.
Millionaires are getting an average annual tax cut of nearly $37,000.
· That's 70 times the $526 average going to tax filers with incomes of $35,000 to $50,000;
· That's 99 times the $372 going to filers with incomes of $25,000 to $35,000;
· That's 344 times the $107 going to filers with incomes of $25,000 or less.
In contrast, the bottom 50% of all earners get just 8% of the benefit ($300 million).
The tax breaks will fail to stimulate the state economy, because most go to people likely to save the money rather than spend it; relatively scant benefit goes to people with stagnant or falling incomes, who have material needs and would circulate the money in their local economies.