Illinois Tax Increase: Tax Hikes To Address Massive Illinois Debt
Illinois Tax Increases: 67% For Consumers, 46% For Businesses | Governor Pat Quinn "Our Fiscal House Was Burning"
Businesses and Consumers in Illinois are bracing for large tax increase as the state struggles to manage its massive debt of close to $15 billion.
In percentage terms the Illinois Tax Increases are astounding - 67% for consumers and 46% for businesses but despite Illinois tax increases , the tax rate in Illinois will still be lower than several nearby states.
Under the billt the current 3 percent personal income tax rate goes up to 5 percent until 2015, when it would drop to 3.75 percent.
Lawmakers compromised on the plan allowing the tax rate to lower in 2025 to 3.25 percent.
A family or individual making $40,000 a year, the increase would amount to an extra $800.
For businesses, the rate now at 4.8 percent would go up to 7 percent until 2015, and then would drop to 5.25 percent.
The Illinois Tax Increases should generate about $6.8 million a year in revenue to the state of Illinois
The tax increases also come with catch, they are tied to spending limits in Illinois as well.
It will be coupled with strict 2 percent limits on spending growth. If officials spend above those limits, the tax increase will automatically be canceled. The plan's supporters warned that rising pension and health care costs probably will eat up all the spending allowed by the caps, forcing cuts in other areas of government.