What is tax-crazy Illinois thinking?

January 11, 2011

The news just gets worse and worse from my home state (via The Tax Foundation):

llinois’ legislature is currently considering an alternative to the initial tax increase proposed last week. Instead of pushing for a 75% increase in the personal income tax and a 49% increase corporate income tax, this proposal would raise the individual income tax rate to 5% and the corporate rate 9.5%. While this proposal is more modest than the first, but it still hurts the competitiveness of Illinois when it comes to maintaining and attracting new business.

If this passes, Illinois will have the third highest corporate income tax in the country behind only Minnesota and Pennsylvania. The corporate income tax has been shown to be among most damaging tax in terms of economic growth.

The individual income tax is often times ignored as a factor in business decisions. This is unfortunate because a large amount of business income is actually filed through the individual income tax. In raising the rate to 5%, Illinois would have the one of the highest flat individual income tax in the country.

In solving their budget problems, Illinois needs to do something that it has not done in a long time and that is look to the future. The governor and the legislature need to look past the next day, week and month and consider the long term effect of their policy decisions.

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[...] What is tax-crazy Illinois thinking?Reuters Blogs (blog)llinois' legislature is currently considering an alternative to the initial tax increase proposed last week. Instead of pushing for a 75% increase in the …Swimming in debt, Ill. considers massive tax boostBloombergIllinois Tax Increase: Bad News for BusinessFox Small Business CenterThe Popular Cigarette Tax Hike AdvancesProgress IllinoisABC7Chicago.com -MyStateline.com  -MyFox Chicagoall 232 news articles » [...]

‘Friday, December 31, 2010
New pension law could force municipalities to raise property taxes 60% While most emphasis has been on Speaker Madigan’s pension reform law setting up for later retirements and less cushy pensions for new firemen and law enforcement hires, little attention has been focused on the shift in pension fund pay=in burden that local city councils argue will now suddenly fall on their already cash-strapped budgets. Chicago’s Mayor Daley blasted the reform bill Quinn signed on Thursday, predicting it will cause Chicago to hike its property taxes up to 60%.

ABC Chicago News covered the topic’

http://illinoisreview.typepad.com/illino isreview/2010/12/new-pension-law-could-f orce-municipalities-to-raise-property-ta xes-60-mayor-says.html

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[...] This post was mentioned on Twitter by Richard Tucker. Richard Tucker said: The unemployment rate in Illinois has been dropping in recent months. Lawmakers'll fix THAT: http://tiny.cc/i84s2, http://tiny.cc/wawt5 [...]