More Local Businesses Slam State Tax Hike

WEST DUNDEE, Ill. (WBBM/CBS) — Some local business owners say just as the economy was beginning to improve, now Illinois is making things tougher again with its new corporate tax hike.

As WBBM Newsradio 780’s Regine Schlesinger reports, the green shoots of the recovery are just starting to grow, but some business owners say the tax increase could amount to an early frost.

LISTEN: Newsradio 780’s Regine Schlesinger Reports

Martin Matushek, the owner of M2 Polymer Technologies in West Dundee, told the Daily Herald he was hoping to hire two more workers this year, but now will not.

“I’m willing to take some pain… but they’re not addressing anything else to save money,” Matushek told the Daily Herald.

Doug Whitley, president of the Illinois Chamber of Commerce, said Gov. Pat Quinn overreached, and the General Assembly just went along with it, sending a message that Illinois is anti-business.

The tax hike raises the personal income tax from 3 to 5 percent for four years. Then the rate drops to 3.75 percent. In 2025, it would drop again to 3.25 percent.

The hike will also boost the corporate income tax rate by nearly 50 percent, from 4.8 percent to 7 percent. In 2015, it would drop to 5.25 percent and in 2025 would drop again to the current rate of 4.8 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.

Some Chicago business owners also told CBS 2’s Vince Gerasole on Wednesday that the tax hike is leaving them worried.

“I have to pay out more but I’m not gonna get in as much,” said Heleen Thanasouras, owner of Lou Mithcell’s restaurant in the Loop. “If you’re raising everyone’s personal income tax as well, that cuts down on what comes to me and then they want me to pay more of less that I got.”

Deirdre Jordan, president of Troscan Design, a Near West Side fine furniture store, said local businesses were already hurting because of the recent recession.

“When the economy dropped we had to let go and cut back drastically,” Jordan said.

The small furniture manufacturer had already cut its work force in half to 16 to survive the recession. Jordan was angry that state lawmakers didn’t make the same sacrifices business owners have.

“Only increasing the taxes without reciprocating (spending) cuts is not only short-sighted, but difficult to swallow; because I had to make big cuts,” Jordan said.

Even a major operation like Turano Bakery, employing 1,000 workers, was worried about the future now that taxes will go up.

“It looks like we’ll have to charge more,” he said.

Some business are already being wooed by other states. The governors of Wisconsin and Indiana both have said Illinois’ tax hike will draw businesses to their states.

But in Wisconsin, the state income tax rate is higher for most taxpayers than in Illinois.

Wisconsin has a graduated income tax rate that starts at 4.6 percent for taxpayers earning less than $10,070 a year. For those that make up to about $20,000 a year, it jumps to 6.15 percent. The rate ranges between 6.5 percent and 7.75 percent for higher incomes in Wisconsin.

Wisconsin’s corporate income tax rate also is higher than Illinois — 7.9 percent compared to the new 7 percent. And, while Wisconsin does not have the additional “Personal Property Replacement Tax,” it does have a state property tax.

As for Indiana, while it has a lower income tax rate than Illinois at 3.4 percent, individual counties are allowed to impose their own income taxes, some of which are as high as 3 percentage points. Indiana’s corporate income tax is 8.5 percent, plus any relative local rates.

  • Tony

    No budget cuts and you slam business, individuals with this tax increase. As a consumer I will now have to save money by cutting back and purchasing needed goods for the entire month outside state lines. Good job Governor.

  • Robert

    There goes any help from the feds. Illinois has raised it’s taxes, cook county has raised it’s taxes, property taxes did go up in Chicago ( even a little bit is still up), and now the alderman of the wards have their own special business taxes called SSA’s. In Roseland , the poorest of the poor, they went from zero to 29.5% of the total property tax. Carrie Austin say’s she didn’t see anything wrong with it. What is goin on here? I’m getting ready to walk away from mine. The numbers are down, the taxes are up. What’s the point.

  • john d

    My business will now be leaving Illinois andI will be bringing the 1064 jobs I have with me. What a joke from our elected officials

  • Chris

    Temp.Tax For 3yrs. I don’t think so once they got your money it will become a perment tax forever.After 3yrs. of paying the tax we will forget about it being a temp.taxs.But its going to be interesting to see in the next 3yrs. if they even try to balance the state buget ??Since they are not giving up anything other then Education fundingThey need this tax hike so they can keep doing things like they have been borrowing money ?? What happen’ed to the millions from the Big Tabacco and the lottory ?? Must have been put in the Genral Fund Account were it can be spent on with no questioned asked??I have a feeling this state is in big trouble.High taxes bisniess leaving or not even thinking of moving here layoffs. hourcuts.Bottom line No Work No Taxies.And wait until are Leagesitlaters vote in a payraise this year on top of the NEW TAXIES they are about to get.Gee when was it when the average Joe got a raise???

  • Top

    Governor Quinn, House Speaker Madigan and the rest of the crowd running Illinois’ budget are theives! They’re stealing our money to pay for their own inept and ignorant bungling of the finances of the state. I’m moving out ASAP!

  • Jim

    Politicians care about you twice. When they promise you the world to get into office (and then lie to your face) and when they want more money from you. Difference between a criminal and a politician? Please help me out, I can’t think of any.

  • More Local Businesses Slam State Tax Hike ::

    […] more on CBS Chicago Tags: businesses, Hike, Local, more, Slam, […]

blog comments powered by Disqus
Daily Weather Reports Delivered To You!SIGN UP NOW: Get daily weather reports every morning from meteorologist Steve Baskerville!
CBS Sports Radio RoundupGet your latest sports talk from across the country.

Listen Live