FUNDING OUR FUTURES - The Equitable Revenue Policies Illinois Families Need to Thrive

Illinois’ tax system is currently the 8th most unequal of all states and the most unequal of all states in the Midwest, according to new data from the Institute on Tax and Economic Policy (ITEP). [...] Funding Our Futures: The Equitable Revenue Policies Illinois Families Need to Thrive 14 A Low-Revenue State: The Poor Pay More, the Rich Get Richer Illinois’ tax system is the 8th most unequal of all states, according to the recent Who Pays? A Distributional Analysis of the Tax Systems in All 50 States report released by the Institute on Tax and Economic Policy (ITEP). [...] Illinois has the 2nd highest effective tax rate for those with the lowest 20% of family incomes and has the most unequal tax system of all states in the Midwest.1 5 Since ITEP published the previous edition of Who Pays? in 2018, Illinois’ tax system has grown more unequal. [...] 6 This rapid increase in the wealth of the super-rich is allowed to occur, in part, because the tax system is not set up properly to tax the income of billionaires. [...] In the past twenty years, the number of estates subject to the tax has dropped 80% as the “exclusion amount” was raised from $675,000 to $4,000,000.4 1 Such a high exclusion amount is unnecessary, as the progressive structure of the tax already accounts for each estate’s ability to pay.4 2 We propose returning the estate tax exclusion limit to $2,000,000, its level prior to 2012, which would gener.