The federal windfall for the ultra-rich is Illinois’ opportunity to finally fund community colleges

By Troy Swanson, Legislative Chair

Republicans just pushed through “The One, Big, Beautiful Bill,” which was called “the largest tax cut in American history” by their own Ways & Means news release. Independent analyses show who wins most: the highest-income households. The Tax Policy Center estimates that more than two-thirds of these tax cuts flow to the top 20% of households, with the top 1% alone capturing most (nearly a quarter) of the benefits. The Institute on Taxation and Economic Policy’s (ITEP) modeling of the 2025 tax debate similarly finds the richest 1% would pocket about $117 billion in 2026 and over a trillion dollars over a decade. The bottom line is that the Big Beautiful Bill is a transfer of wealth away from working people to the ultra-rich.

Illinois, meanwhile, still ties its own hands with an outdated revenue system. ITEP’s “Who Pays?” shows Illinois’ state-local tax system is among the most regressive in the nation: the lowest-income 20% pay roughly double the share of their income that the top 1% pay (see ITEP’s “Who Pays?” for the full report). During the 2020 “Fair Tax” debate, nonpartisan analyses consistently showed that only the top 3% of Illinois taxpayers would have paid more under a graduated income tax; everyone else would have paid the same or less. Additionally, Illinois overwhelmingly taxes goods, not services, even though services now dominate economic activity. The Civic Federation notes Illinois taxes only 29 of 176 commonly taxed consumer services (far fewer than many peer states) while CTBA reports that over 72% of the state economy is service-based. In short: our tax structure provides a built-in discount for the rich.

Community colleges are feeling the impact. The Partnership for College Completion estimates Illinois community colleges face an annual funding gap of roughly $637 million, and documents how colleges “offset declining state appropriations by increasing tuition and fee revenue.” Illinois Community College Board data show that on average tuition and fees rose again in FY 2025 to $4,813. As state support lags, tuition and fees go up and student services get stretched thinner, undermining access and completion, especially for working-class and first-generation students.

The takeaway: The federal tax bill shifts enormous new savings to ultra-rich households. Illinois can (and should) capture a fair share of that windfall to invest here at home.

What that looks like:

• Revive a graduated income tax so Illinois’ top earners contribute like they do in progressive-rate states, while protecting 97% of filers (ctbaonline.org).

• Modernize the tax base to reflect a service economy—prioritizing luxury and high-end professional services and designing safeguards for low-income families (Civic Federation).

• Decouple where prudent from new federal giveaways that primarily benefit the top, and direct resulting revenue into an adequacy-based formula for community colleges so tuition pressure eases and student supports expand (Tax Policy Center, update.occrl.illinois.edu).

  
  

Every budget is a choice. Washington just chose to hand the ultra-rich another break. Illinois can choose a better path—one that funds our community colleges, keeps tuition within reach, and delivers the counseling, childcare, advising, library services, and transfer supports our students deserve.