A proposed Illinois constitutional amendment that would impose a 3% surtax on income over $1 million is no longer just an introduction. It is now moving through the House.

As of yesterday (April 21, 2026), the resolution passed out of the House Revenue & Finance Committee (13–7) and has been read a second time, where it now sits on the House calendar for short debate. A hearing is also scheduled, signaling that leadership is at least willing to keep the proposal in play.

Substantively, the measure remains straightforward. It would amend the Illinois Constitution to impose an additional 3% tax on the portion of an individual’s income exceeding $1 million. It is said that the revenue would be split evenly between property tax relief and per pupil funding for school districts.

Because this is a constitutional amendment, it cannot take effect unless approved by voters at a general election. Reports indicate though that it may stall in the Senate.

A Familiar Path After the Graduated Tax Failure

This proposal is best understood as a narrower version of Illinois’ prior attempt to restructure its income tax system. In 2020, voters rejected a constitutional amendment that would have replaced the flat tax with a graduated rate structure. The general rule is that to pass, 60% of voters must vote in favor. In 2020, it received less than 47%.

The more complex rule is that an Illinois Constitutional Amendment that is placed on the ballot by the General Assembly or by Petitions gets approved by voters in one of two ways. First, by receiving 60% of the votes cast on the Amendment. Or, by receiving 50% a majority of total votes in the election.

Here, lawmakers are taking a different approach. Rather than rewriting the entire system, the amendment keeps the flat tax intact but layers on a targeted surtax for high-income earners. That is likely not accidental. The earlier failure suggests broad structural change is a difficult sell; targeted increases tied to specific uses: property tax relief and education, may be more politically viable.

But the core dynamic is unchanged. Like the 2020 measure, this proposal ultimately turns on voter approval, and it will likely be framed the same way: fairness, tax burden allocation, and trust in how the State will use the revenue.

Mark Denzler’s Testimony to the House Committee

Mark Denzler, President & CEO of the Illinois Manufacturers’ Association, testified yesterday in opposition to the proposed 3% surtax on income over $1 million, joining the Taxpayers’ Federation of Illinois and NFIB.

His core argument is that the proposal is framed as targeting high earners, but in practice would fall heavily on pass-through businesses. He estimates roughly 22,000 small and mid-sized businesses (primarily S corporations and LLCs) would be affected, with less capital available for reinvestment.

Denzler also emphasized a mismatch in the proposal’s design: while businesses would bear increased income tax liability, the promised property tax relief appears limited to residential taxpayers. This would leave employers, who already face high property tax burdens, with no relief.

Because the Constitution maintains a fixed ratio between individual and corporate income tax rates, Denzler explained, increasing the individual rate could create pressure (or justification) to raise the corporate rate as well.

Finally, he questioned the reliability of the revenue allocation, noting the absence of a true “lockbox” to ensure funds are used exclusively for property tax relief and education, raising the risk of future reallocation.

Denzler closed by pointing to the prior failure of the graduated income tax amendment and urging lawmakers to reject another constitutional tax increase, particularly in the current cost environment.

Where This Leaves Things

At this stage, nothing changes for taxpayers. But the bill’s movement out of committee and onto the House calendar is a signal: Illinois is again testing the limits of its constitutional flat tax framework — this time through a more incremental, carve-out approach rather than wholesale reform.

If it advances further, the real decision will once again be made at the ballot box.