While the good little cash cows of Illinois were tucked in their beds, and criminals were ignoring the law, the Illinois state legislature voted on a closed door deal at 1 o’clock in the morning to raise personal income taxes by 66%. Eerily familiar isn’t it?
Law abiding residents’ income tax percentage will go from 3% to 5%; criminals using the black market economy – 0% Who is leaving Rahm’s fiefdom first?
Illinois Lawmakers Approve 66% Tax Hike
UPDATED 01/12/11 10:43 a.m.
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.Around 1 a.m. Wednesday, the Illinois Senate approved the tax hike by a vote of 30 to 29. The Illinois House approved the tax hike on Tuesday evening, by a vote of 60 to 57.
Gov. Pat Quinn still must sign the bill into law, but he has supported a tax hike all along, although this plan is double what he originally said he’d support.
But Quinn agreed to the deal in closed-door meetings with top Democratic lawmakers this week and he was on the Senate floor when the vote was taken.
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.
Democrats said the tax hike will help plug a $15 billion budget hole.
“We’re going to pay bills on time, and that’s a huge change,” said state Senate President John Cullerton (D-Ill.)
Cullerton emphasized that the tax hike is only one portion of a solution to the state’s budget crisis.
“The taxes are going to not borrow anymore; to make our pension payments without borrowing our pension payments; to make up for the loss in federal revenues. They’re not going for any new programs or any new spending,” Cullerton said. “There’s going to have to be further cuts, even with this tax.”
The tax hike 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.
But Republican critics say the hike will harm middle class families.
“This means hundreds of dollars for Illinois families that they’ll be paying more to the State of Illinois, and the irony is the money they have been sending to the state has been so grossly mismanaged for the last decade,” said state Senate Republican Leader Christine Radogno (R-Lemont.)
The tax hike is not set up to be permanent. After four years, it drops to 4 percent.
“This is always tough to raise taxes,” Cullerton said. “We’ve done it before under Republican governors, and when there’s been big recessions, and that’s what we responded to.”
The higher taxes will generate about $6.8 billion a year.
The tax hike followed fiery rhetoric on both sides of the Senate aisle.
“We don’t have a better choice today!” state Sen. David Miller (D-Dolton) said in a raised voice. “Everybody wants to go to heaven, but nobody wants to die!”
Miller, an unsuccessful candidate for state comptroller last year, later collapsed while watching the Senate debate, although he seemed awake and alert when paramedics responded and took him for further treatment.
Critics have expressed doubt about whether the tax hike will really solve the state’s budget problem. Earlier this week, the Better Government Association called the move to pass a tax hike plan “closed-door backroom dealing,” and bemoaned the lack of public hearings or answers to questions.
Radogno also said she believes lawmakers have failed to address the factors that are contributing to the ballooning deficit.
“That’s the big lack in this whole bill. No one’s addressed the spending yet,” Radogno said. “I don’t just mean spending at the state level, but there’s so much work that this body could do to make Illinois more efficient.”
Republicans also fundamentally reject the idea of raising taxes after years of spending growth.
“We’re saying to the people of Illinois, ‘For eight years we’ve overspent, now we’re going to make it your problem,”‘ said Rep. Roger Eddy (R-Hutsonville.) “We’re making up for our mistakes on your back.”
As a Hoosier who works directly across the state line on the southside of Chicago, this increase will effect me and my family. The most intellectually insulting aspect of this ploy by the Illinois general assembly is the 2% cap on increased spending they have allowed themselves or the new tax increase is canceled. Does anyone believe they will not inch the spending up by this magical 2% number? Sure they will, so the 2% increase will become a zero sum gain by the state.
So much for fiscal responsibly because that is not happening in Illinois, the gluttonous legislature has just piled 2% on the backs of tax payers. Is it any wonder that Illinois can not meet its financial obligations?
Isn’t this what Blago predicted? He was wrong on many things, but absolutely correct on this. His charge that they wanted him out was due to the fact that he refused to raise taxes on the little guy is taking on more strength. Wonder if he is missed yet?
BTW, why doesn’t the prosecution come up with all those tapes? Seems mighty funny that we haven’t heard them. Silence from Fitzpatrick? is very suspicious, since he felt the prosecution of Blago was needed ASAP.
Chicago, and the whole state of Illinois, seems to be full of dirty little tricks (and tricksters) weaaving in and out of Washington like an evil loom.
Wonder what Old Abe would think of the whole situation?
When will the political neophytes realize that Government is not your friend, but the Slave Master of the Federal Reserve System that owns your “life, Liberty, and pursuit of happiness”.