The next steps in the fight for tax fairness

The Fair Tax amendment didn’t win the support needed from Illinois voters for the State to abandon its flat income tax. 

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We are here to offer an antidote to this loss. While we cannot raise taxes on the wealthiest among us, we still have the opportunity to make Illinois’ regressive tax system a bit more fair. We can bring equity to Illinois’ tax system by expanding the Earned Income Credit. 

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Now is not the time to stop thinking about tax equity, it’s the time to deliver it.

 

The Earned Income Credit (EIC) reduces the amount of tax owed and may lead to a refund for people with low- and moderate-incomes. Currently structured as a supplement to the federal Earned Income Tax Credit (EITC), the state EIC provides hard-working families, the majority of whom earn less than $55,952 per year with a tax return of up to $1,157. 

 

Our proposal to modernize and expand the EIC would include:

• Working adults age 18-24 and 65+;

• immigrants who pay taxes, but do so using an ITIN (Individual Taxation Identification Number) rather than a Social Security Number; 

• MAP grant-eligible students

• Unpaid caregivers, who work hard yet forgo opportunities to earn income outside the home in order to care for their children, elders, or disabled family members. 

 

Expanding EIC to these groups would bring tax relief to hundreds of thousands of the most deserving taxpayers in our state. Increasing the current 18% match of the federal EITC to 36% would put hundreds of millions of dollars in the pockets of families and in communities that are struggling the most.

 

What expanding EIC would do for Illinois taxpayers: 

1. Bring equity into one of the most regressive tax systems in the country by targeting relief to low-income and middle-class families; helping reduce child poverty and support underserved communities. 

2. Reduce poverty and give nearly 1.5 million Illinoisans the financial independence they need for economic stability.

3. Boost the local economy. Every EIC dollar has a multiplier effect of $1.50-$2.00 in benefits to the local economy and small businesses.