Letters

Income tax ratio

EDITOR: I would like to try to clarify one point in reference to the Governor's Tax Reform Commission and the article on the Commission by Diane Ross in the February issue. Ms. Ross cited the recommendation to raise the rate of the corporate income tax from 4.0 to 4.4 or 4.8 percent and then indicated "depending on what is necessary to maintain the requirement of the 1970 Constitution that the ratio of the corporate rate to the individual rate remain at eight-to-five."

The Illinois Constitution does not require that the 8 to 5 ratio be maintained; rather, the requirement is that the corporate income tax rate shall not exceed the rate imposed on individuals by more than a ratio of 8 to 5. The governor and the commission have proposed additional income taxes that would make the ratio closer to 7 to 5. All of this, of course, excludes the additional corporate income tax imposed in 1979 to replace the corporate personal property tax. The replacement tax was specifically excluded from the ratio by constitutional provision.

A proposal which would result in a 7 to 5 ratio is constitutional, and given present conditions in Illinois, seems to me to make both economic and political sense. The thing most needed is some increase in the income tax rates, in order to maintain essential state and local services.

Thomas D. Wilson
Normal

July 1983 | Illinois Issues | 4