Illinoisans struggling with prices and property taxes may have to wait until 2028 for the General Assembly to reconsider relief for property-tax burdens by imposing a 3% surcharge on those reporting personal annual incomes of $1 million or more. The House failed to vote in time to the question to be placed on the November ballot.
The millionaires tax idea came as a possible amendment since Illinois’ constitution mandates a flat income tax rather than a graduated system with different rates for different incomes, so an amendment is required to enact an income tax change. Illinois is one of 15 states with a flat tax.
Sponsored by Rep. La Shawn Ford (D-Chicago), the new tax on the state’s wealthiest would have generated $4.5 billion a year, according to the Illinois Department of Revenue.
A disappointed Ford said, “We missed an opportunity to be progressive. You don’t see that happening with Trump and these Republicans. When they have the power to do something to help their constituents, they do it.”
The tax-the-rich idea has been building steam nationwide, especially as lawmakers cope with cuts in federal programs such as Medicaid and food stamps, mandated by the Trump administration, its submissive GOP-majority Congress and their “Big Beautiful Bill” passed last year.
Six states – California, Connecticut, Maine, Massachusetts, New Jersey and New York, plus Washington, D.C. – levy specific millionaire taxes, surcharges, or have income brackets targeting earners making more than $1 million, and Minnesota and Rhode Island are considering one. At local levels, “tax the rich” measures have passed in San Francisco and Portland, Ore., and in California, voters this November will vote on an additional, one-time 5% “wealth tax” on the Golden State’s 250+ billionaires, primarily to pay for health care.
“This is a moral test about whether the Democratic Party will be for the billionaire class and the donor class or whether we will be for the working class,” said U.S. Rep. Ro Khanna (D-Calif.), who backs California’s 5% tax and also introduced a 5% national billionaires’ surtax bill backed by U.S. Sen. Bernie Sanders (I-Vt.).
Last month, at a Washington rally to reduce income inequality and the influence of multi-millionaires on government, the Machinists union endorsed that effort.
“We proudly endorse the ‘Make Billionaires Pay Their Fair Share Act’,” said IAM Legislative Director Hasan Solomon. “The economy is a game and the rules have been written for billionaires to win and workers to lose.”
Taxing the rich would help: Illinois report
In a report issued this Spring by the Illinois Economic Policy Institute, authors Frank Manzo IV from IEPI and Bob Bruno from UIUC’s Project for Middle Class Renewal said, “Illinois has a tax system that disproportionately favors the wealthy. As a share of their incomes, middle-class and working families currently pay 5% more towards state and local taxes than households with incomes in the top 1%.
“Consequently,” continues the report (“Adopting a Millionaires’ Tax in Illinois: Impacts on Property Taxes, Public Schools, and the Economy”), Illinois has the 8th most regressive tax system of the 50 U.S. states. A flat individual income tax and comparatively high property tax burdens are two of the system’s most regressive characteristics.”
Former Gov. Pat Quinn, who supports a millionaires tax, agrees, saying, “Illinois has an unfair tax code.”
Also, before the proposal died in Springfield, Quinn said, “To turn their backs on property taxpayers would be very disappointing. The people have spoken.”
(Indeed, voters supported non-binding referendums for a millionaires tax in 2024 and 10 years earlier.)
There are about 77,000 millionaires in Illinois, about 1.2% of income taxpayers, and creating a 3% surcharge on them “could decrease the overreliance on local property taxes for school district funding.”
Besides Republicans’ familiar suggestion to instead cut (unspecified) spending, opponents warned that millionaires would move away. Also, business interests, especially the Illinois Retail Merchants Association, argued that it would hurt small businesses (whose owners “pass through” their business incomes as personal incomes), but it’s unclear how many small businesses generate enough net income to be millionaires.
Other critics blamed taxpayers insisting on the wealthy to pay their fair share as engaging in class warfare.
One excuse for the proposal not even being voted on was the question of how to distribute the new revenue. Another version, sponsored by Rep. Natalie Manley (D-Joliet) would have split its new funds between property-tax relief and funding for K-12 education).
Also, support by House Speaker Chris Welch (D-Hillsdale) and Democratic Gov. JB Pritzker seemed lukewarm. Pritzker commented in generalities, saying, “To pay the bills of the state of Illinois, it’s fairer if the wealthiest people in the state and the wealthiest corporations in the state pay more than average folks, working folks, and the most vulnerable.”
Taxing the rich a fair share would grow the economy, Manzo and Bruno show.
“Nationally, economic growth in states with millionaires’ taxes has been just as robust as in states without them,” they say. “From 2014 to 2024, the combined GDP of California, New York, New Jersey, Massachusetts, and the District of Columbia increased by 67%. By contrast, in the 46 other states, aggregate GDP improved by 66%. Illinois’ economy expanded by 49% over this 10-year period.”
Also, other economic factors would improve.
“Adopting a millionaires’ tax could grow the Illinois economy by stimulating consumer demand and increasing public investments,” says the 29-page report. “Economic research has demonstrated that low-income and middle- class families spend larger shares of their incomes while high-earning individuals save more.”
Elsewhere in Illinois, the Illinois Revenue Alliance – made up of the Illinois Federation of Teachers, SEIU Healthcare Illinois, Warehouse Workers for Justice, and various progressive community groups – in late May rallied at the state Capitol and lobbied lawmakers to raise taxes on corporations and the rich. A parade of sympathetic lawmakers trooped to the podium in Chicago first.
State Sen. Lakesia Collins (D-Chicago), a former SEIU Local 73 organizer, said her constituents “are under real pressure.
“Costs are up. Wages are stressed. And they’re having to make hard choices,” she said. “And when the federal government creates giant tax code carve-outs for giant corporations and the billionaires, the Illinois tax code is automatically adjusted [to reflect those changes].
“Our communities need a leap forward,” she added. “My colleagues and I will continue organizing, advocating, and fighting to hold billionaires accountable and build an Illinois that works for working people, not just the wealthy few.”
