SPRINGFIELD, Ill. (CBS) – By a single vote, Illinois lawmakers approved a 66 percent increase to the personal income tax overnight, and soon, your paycheck will be shrinking.
But as CBS 2 Chief Correspondent Jay Levine reports, Democratic state lawmakers have said the tax hike is necessary to get the state’s outstanding bills paid. Lawmakers also say cuts and spending limits will be part of the plan.
The hike increases the state’s personal income tax rate from 3 percent to 5 percent.
In real numbers, if your gross income is $50,000 a year, your state income taxes will rise from $1,500 to $2,500 a year.
As CBS 2′s Susanna Song reports, the tax hike wasn’t sitting well with Chicago residents Wednesday morning. She spoke with dozens of commuters Wednesday and none of them supported the tax increase.
“I don’t like that. I’m already losing enough money,” one woman said.
“My taxes are high, so I just really … I’m really struggling as is,” another woman said.
The hike will also boost the corporate income tax rate by nearly 50 percent, from 4.8 percent to 7 percent. In addition to the corporate income tax, many businesses in Illinois pay a “Personal Property Replacement Tax” of 2.5 percent of income, bumping their corporate tax rate to 9.5 percent.
So, the Land of Lincoln has not only taken a bigger bite out of the average employed person’s paycheck, they’re also working hard to make it more expensive for businesses to stay in business… which will lead to many of them closing or fleeing the state for greener pastures elsewhere, meaning fewer employed people.
I’d call that a real lose-lose situation. But I guess that’s what Illinois Democrats want.