Lawmakers Pushing For Rollback Of Corporate Income Tax Hike
Featured & Trending:
Latest News Headlines:
Get Breaking News First
SPRINGFIELD, Ill. (CBS) – Illinois House Republicans – and even some House Democrats – want to roll back the state’s corporate income tax increase, but there’s no serious talk of also rolling back the personal income tax hike.
The state’s corporate income tax was raised from 4.8 percent to 7 percent in January. House Republicans have filed a measure to roll back the corporate rate to 6 percent in 2013.
The tax hike was already supposed to be temporary, although the GOP measure would speed up the reduction in the corporate rate.
LISTEN: WBBM Newsradio’s Alex Degman reports
Under the existing tax package, the 7 percent rate lasts until 2015, when it goes down to 5.25 percent. It returns to the original 4.8 percent level in 2025.
Under the Republican plan, it would go down to 4.8 percent in 2014.
Some Democrats, many soon up for election, filed a measure to eliminate the entire corporate tax increase effective Jan. 1, 2012, which would mean it has to pass the House and Senate with a two-thirds majority within the next two weeks. It’s unclear if that’s on the table.
House Minority Leader Tom Cross (R-Oswego) said his party also wants to roll back the temporary personal income tax increase, but it’s unrealistic.
“We have to work within the confines of a system we don’t control. We don’t like that, but we recognize that,” Cross said. “So our approach, we think, helps create an environment that will create jobs.”
The bill also provides corporate tax relief in the event of a continued increase in the state’s unemployment rate and it would take effect immediately.
The rate would be reduced by .25 percent each time the unemployment rate increases by .3 percent over a four month span. For example, the corporate tax rate would decrease from 7 percent to 6.75 percent should the unemployment rate rise from 10 percent in January to 10.3 percent in April.
Senate Minority Leader Christine Radogno (R-Lemont) issued a statement on the House Republicans’ plan, saying, “We’re hopeful the House effort is successful and we’ll have the opportunity to repeal the tax increases that are driving jobs out of Illinois and hurting families. Our similar efforts in the Senate have so far fallen on deaf ears. But perhaps, with the spotlight now clearly shining on the failure of the Democrats’ tax increases and fiscal management, they will join with us to take a comprehensive look at Illinois’ tax structure, business regulation and over-spending.”
Cross warned passage of the proposal will require spending cuts, as a one percentage point drop in the corporate income tax rate means the state loses $400 million.