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.