Under the legislation, the income tax rate would, at least temporarily, rise to 5 percent from its current rate of 3 percent. Lawmakers had talked about an even steeper increase, but set that aside as the hours went by and the debate grew increasingly emotional. The rate for corporate taxes would rise to 7 percent from its current rate of 4.8 percent. As part of the deal, the state’s spending growth would be limited from one year to the next over the next four years.
Gov. Patrick J. Quinn, a Democrat whose signature would be needed to make any rate increase final, has indicated in the past he believes a tax increase is necessary.
The tax hike irked Republicans in Springfield, the state capital, and business owners around the state. Again and again, Republicans argued that the state needed to make significant spending cuts to solve its deficit before it even began considering a tax increase.
1 comment:
This is a welcomed departure from the no holds barred pro-austerity position taken in many other states. But I'm still worried about IL for a number of reasons. First off, IL has a flat income tax (which is, in ultra-regressive fashion, written into the state constitution making it hard to change), which means the tax increase will have some bad effects on working class people (although that is clearly not the case with the decision to raise the corporate tax). Second, the city budget in Chicago is in serious trouble and is already leading the Democrat machine in the city to propose deep cuts to services, and large layoffs in the public sector. It's going to take more pressure from below to make sure the axe doesn't come down on working people in the city.
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