Huge Income Tax Hike A Step Closer

SPRINGFIELD, Ill. (CBS) — Gov. Pat Quinn and both houses of the Illinois General Assembly have agreed on raising the state income tax.

If the bill passes, the plan would raise the personal income tax rate from the current 3 percent to 5.25 percent. That’s a 75 percent increase. In real dollars, that would mean if you currently owe $1,000 in taxes, next year you would owe $1,750.

LISTEN: Newsradio 780’s Dave Dahl Reports.

The increase is for four years. After that, the personal income tax would go down to 3.75 percent.

The Democratic leaders in the Illinois General Assembly believe this income tax increase, a corporate tax hike, and a $1-per-pack tax increase on cigarettes would erase the state’s $15 billion budget deficit.

The permanent portion would be used several ways. Some would be devoted to schools and some to repaying an $8.5 billion loan that would be used to pay overdue bills, state Senate President John Cullerton said.

Another chunk would go to property tax relief in the form of annual $325 checks, he said. The checks would replace the property tax exemption that homeowners can now claim on their income taxes.

“I want to emphasize that it is just an outline that we’re working with, and that we’re talking to our members about,” said Cullerton spokeswoman Rikeesha Phelon. “But we’re looking at, possibly, a quarter of a percent that would possibly go for permanent property tax relief. We’re looking at .5 percent of that going toward paying unpaid bills.”

Cullerton said House Speaker Michael Madigan and Gov. Pat Quinn fully support the tax proposal, although Quinn once promised to veto any increase of that size.

Madigan’s spokesman said he couldn’t discuss the speaker’s position. The Senate has approved tax increases in the past, so the biggest question about this proposal is whether Madigan can find enough votes to get it through the House.

The governor’s office put out a statement that stopped short of saying the three leaders had reached a final agreement. Rank-and-file legislators said Quinn described the tax plan to them earlier in the day and portrayed it as a deal among all three of the powerful Democrats.

Democrats say they have no choice but to raise taxes as one part of a solution to Illinois’ massive budget crisis. The state deficit could reach $15 billion in the coming year. The government is borrowing money to cover some obligations, letting bills go unpaid for months and cutting corners everywhere from state prisons to state parks.

The state House is expected to caucus and discuss the income tax hike later Friday, but most likely vote on it next week.

The state Senate is not back in session until Monday, which is the earliest it would vote.

(TM and © Copyright 2010 CBS Radio Inc. and its relevant subsidiaries. CBS Radio and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.)

  • esmarcus

    Sure hope we don’t hear about raises in Springfield. Does anyone really believe the taxes will go down after 4 years?

  • republican

    yes veto democratic……….dumb people never cease to amaze me.

  • Bill

    Nothing is free….Democrats buy votes with democratic giveaways funded by working people.

  • Jim

    Democrats pay off Unions to get votes and raise taxes to pay for the Unions excessive salaries. It’s a horrible cycle that is very difficult to end. The only people that lose are those that pay taxes in the private sector.

    • Jim

      Oh yeah and politicians make so much money that this is a drop in the bucket for them while it will force others into forclosure or force people not to eat, but politicians don’t care about us for anything other than paying them money. Why not start charging a state income tax on pension earnings? Because they don’t want to pay them when they get theirs…

  • smith

    Yesterday I read an article on how many people are leaving Illinois. I can’t imagine why Mr. Quinn, can you?

  • Mr Voter

    Let’s start out on the new re-call bill
    and we also need to toss more of these carreer political lackies out…rember who votes on what…toss them out, let them get jobs at burger king, with their great insurance,overpayed, hiring family & friends…enought is enought…..
    IL. Land of Corruption………

  • l closely

    Fortunately, the only non-corrupt politician from the State of IL is currently occupying the White House, so we know things will get better!

  • El Puto!

    Don’t like it? Better your situation and move out of the state. Indiana is not at all far from Chicago.

    People who sit around complaining online are the weakest sort.

  • Michael McCullough

    Dang. That means a lot of people are going to leave Illinois and move to Texas.

  • David

    “Democrats say they have no choice but to raise taxes”

    I guess the idea of maybe cutting spending doesn’t even occur to their minds, then?

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  • Georgia

    Dear Illiinois,
    Thanks for sending us all the manufacturing jobs and wealth creators by ratcheting up taxes (again).


  • Chris Ar

    Pure insanity. I can’t wait for the article this time next year showing that revenues from these increases are drastically short of expectations and that affluent IL residents are fleeing to FL and TX.

  • FR

    Instead of increasing taxes, Illinois should fine companies that cheat Illinois consumers. KFC is the clearest example that comes to mind with with the web coupon that they then made people jump thru hoops to redeem. KFC’s parent, Yum, has a yearly profit of about 1 billion dollars. Illinois should fine them that much for such an egregious example of false advertising. Then go after any other companies that cheat consumers. Don’t raise taxes on all businesses, just the dishonest ones.

  • Just the Facts

    Gotta love a the IL voters………………….Quinn stated he wanted to raise taxes during his campaign and they vote him in anyway!!!!!

  • Let's NOT Forget

    Combine this with the pension bill Quinn just signed that will cause property taxes to skyrocket!!!!! Keep voting democratic you morons!!!!

  • Larry

    Hey Quinn,wy don’t you tax people with pricey pensions?
    Oh,you would be taxing the 5.75% on your buddies.Let the people
    with no pensions pay the bills.

  • Larry

    I mean 5.25%. Yeah my blood pressure is increasing!!!

  • West Town

    At least they’re doing this around tax season. Reminds the people who pay taxes what “they” voted for.

    “Fortunately, the only non-corrupt politician from the State of IL is currently occupying the White House, so we know things will get better!”

    I’m trying to find sarcasm there, but I can’t. I’m afraid.

  • Katie

    The people who put Gov Quinn back in order, must be rich or did not pay attention to his speeches. He said all along he was raising taxes so he can borrow more money. Who do you think pay for this? We do, I did not vote for him. The politicians need to listen to the people and live within there means. We all have to. No one is bailing me out. My Family is Living from payday to payday. Everyone one we know is living the same way I do. Many people we know are fighting to find jobs.
    We all have to look at our budgets and spend what we have. If they went from line to line. I am sure there is carless spending going on. This tax increase is sad since everyone I know has no extra money.

    Politicians in Springfield and in Washington DC. Listen. I am broke…and so are my friends and family.

  • Don Herbert

    Is my understanding of this situation correct?

    Unions give Quinn $10 million in campaign contributions to run to governor.

    Quinn wins the race and becomes a union puppet.

    Quinn proposes a multi billion dollar increase in income tax to fund the underfunded union pension plans. The funding would be immediate because the state would sell muni bonds to investors.

    The income tax increase is needed to persuade investors to lend money at low interest rates.

    The union members receive billions in exchange for $10 million in campaign contributions.

    Quinn, when he decides not to run again for public office, pockets the leftover campaign contributions, because in Illinois politicians have made it legal to steal, and called it “campaign finance reform”
    The names change but to game is the same.

    As Yogi Berra once said “its like deja vu all over again”.

  • bob

    If all the crooks already voted for this doubling our taxes to pay for lavish pensions and ridiculous public workers salaries, why not show us how they voted so people can see the sleeze they voted for are the ones taking money out of their children’s mouths.

  • Hoosiers!!!

    Daniels has enacted deep budget cuts and eliminated many government programs to keep Indiana’s budget balanced without a tax hike during his six years in office.

  • Luke

    Nothing like a little at a time, bet that last tax dollar i’ll be in Mo or Ar sooner than I had planned

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