Scenario 1: Andre owns a small manufacturing business in O’Fallon, employing 100 workers who make specialized fasteners used by auto parts companies. He’s married to Melody (a nurse practitioner) who makes $115,000 annually. Andre’s company is Subchapter S, so he pays personal income taxes on its profits, which after years of slow recovery from the Great Recession, have inched up to $200,000 annually. Andre and Melody’s personal income tax bill would increase by $1755 to $17,347.50 annually, an increase of 11.3 percent.
Scenario 2: Jane is a young attorney in Chicago, making $150,000 annually. She’s married to Julio, a City of Chicago Firefighter who makes $125,000. Together, they have a small real estate business on the side, from which they earn another $25,000. Their total income tax bill increases by $1,335 to $16,185 annually, a nine percent increase.
Scenario 3: Jasmine is a McDonald’s owner/operator based in Taylorville, IL. She owns three franchises (Subchapter S), each employing 40 workers. After expenses including salaries and interest, her profit per store is $153,900. Her total tax bill increases by $5,862.60 to $36,705.15 annually, an increase of 25.7 percent.
Scenario 4: Aimee is a Professor at the University of Illinois in Urbana-Champaign, making $158,000 per year. Her husband Lee is also a professor, making $120,000 per year. Together they have a startup at the UI Research Park, working to improve wheelchair technology. Their startup earns them $45,000 per year. Their Illinois tax bill would increase by $1,979 per year to $17,967.50 annually, an increase of 12.4 percent.
Scenario 5: Jacqui operates a day-care center with her husband Ed, which provides care for 500 working families. Their business is a Subchapter S corporation, netting $520,000. Their Illinois income tax bill would increase by $7,515 to $33,255 per year, an 29.2 percent increase.