Roughly 99 percent of Illinois taxpayers and an overwhelming number of small businesses would see an income tax cut under a proposal advanced Tuesday by Senator Don Harmon (D-Oak Park).

Legislation making its way through the Illinois Senate would amend the Illinois Constitution and permit the General Assembly to enact a fair state income tax, with lower rates applying to lower incomes and higher rates applying to higher incomes.

The amendment – SJRCA 1 – passed in the Senate Executive Committee on Tuesday, clearing the way for it to move to the Senate floor for consideration. Identical legislation is making its way through the Illinois House.

“I firmly believe it is time for Illinois to join the modern era and implement a fair income tax that helps the hardworking people of this state hold on to more of their paychecks,” Harmon said.

“Illinois taxes all residents at a flat rate across the board, regardless of income. This archaic system of penalizing the poor and rewarding the rich is ripe for exactly the kind of meaningful structural reform Gov. Rauner has been demanding.”

The constitutional amendment only would enable the state to enact a fair income tax. Separate Senate legislation – an amendment filed Tuesday to Senate Bill 518, which is sponsored by Senator Toi Hutchinson (D-Chicago Heights) – would implement the fair tax rates.

Illinois is one of only two Midwestern states with a flat tax, which is enshrined in the state constitution. Indiana has a flat tax, but it allows an additional local income tax to be collected, with rates that vary by county. SJRCA 1 would bar local governments in Illinois from imposing income taxes.

Among all states, 34 have a progressive – or fair – income tax. Nine have a flat income tax, and seven have no income tax at all. Missouri, Wisconsin, Iowa and Minnesota have a progressive income tax structure.

“There are better ways to structure tax rates, as other states already have learned. Illinois has been slow to come to the table on this,” Harmon said.

“The time is right for serious consideration of a fair state income tax, which would result in a healthier bottom line for working families, as well as for the state government they help to support.”