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Federal-style, graduated income tax proposed for Illinois

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SPRINGFIELD - Though a number of new Illinois tax proposals have been killed by lawmakers this year, others are already making plans to push for a new style of state income tax that reflects the federal system.

Currently, everyone in Illinois pays a flat rate on their earnings, unlike federal income taxes, where the rich generally have to pay more.

"This is not a radical new concept," said state Sen. Mike Frerichs, D-Gifford.

He's treasurer of a new state campaign fund designed to lobby voters and others to go along with the idea. State Sen. Kwame Raoul, D-Chicago, is the fund's chairman.

But Frerichs said they don't want to get started just yet. He said lawmakers' unfinished business of the year has to be cleared out first.

Potential issues still to tackle include a massive statewide construction plan, the new casinos proposed to pay for it and a rescue plan for the Chicago-area transit system, which is threatening serious cuts and higher fares.

Beyond those large obstacles, Gov. Rod Blagojevich has been staunch in his opposition to income and sales tax hikes.

Still, Frerichs said getting the fund started would be a key to eventually campaigning for the constitutional amendment needed to change the tax system.

A graduated income tax, Frerichs hopes, could be a way to send more money to schools while reducing some property taxes. A similar plan that would raise the income tax to send more money to schools has lingered in Springfield for years without any success.

"This is probably, I hope, an easier way of getting that done," Frerichs said.

Lawmakers have no scheduled sessions the rest of the year, but could return to Springfield to work. A House hearing is scheduled for Wednesday to review a plan to expand gambling across Illinois in order to pay for new roads, schools, and university and prison buildings.

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