Illinois House amendment includes permanent income tax hike
House Floor Amendment No. 2 to Senate Bill 9 would permanently increase the individual income tax rate to 4.95 percent and the corporate income tax rate to 7 percent, but would not expand the state sales tax to services.
During the ninth day of the Illinois General Assembly’s 10-day special session, an amendment was filed in the Illinois House of Representatives that would permanently raise state income taxes.
Like the version of Senate Bill 9 that the Illinois Senate passed in May, House Floor Amendment No. 2 to SB 9 would permanently raise the personal income tax to 4.95 percent from the current 3.75 percent. The corporate income tax rate would rise to 7 percent from 5.25 percent. The income tax hikes under the amendment, however, would be effective July 1, 2017, rather than Jan. 1, 2017. The amendment also ties certain tax exemptions to income levels.
Find out how much the tax hikes will cost you
Plus additional Corporate Income tax per household: $98
That's an increase of as much as $0
family size above
The House amendment does not expand the state sales tax to numerous services such as laundry, dry cleaning and storage, as SB 9 does. Nor does the House amendment contain the cable and satellite TV taxes in the Senate version.
Nonetheless, the rate hikes in the House bill still would mean $5 billion per year in additional income taxes on Illinoisans. The budget proposals currently moving in the General Assembly would all impose billions in higher taxes, and none provides the structural reforms needed to rein in state spending and get the cost of government under control.
Illinoisans have one of the heaviest state and local tax burdens in the nation and pay the highest property taxes. And a poll released by the Paul Simon Public Policy Institute in October 2016 shows taxes are the No. 1 reason people want to leave the state. Illinois already loses more residents to out-migration than any other state. It can’t afford to drive out still more residents – and taxable income – by hiking taxes.
State lawmakers need to stop overtaxing Illinois residents and instead pass a reform budget that balances without raising taxes.