Why an Income Tax Hike Isn’t Right for Illinois
Illinois Governor Pat Quinn is pushing a massive increase to the state income tax to finance more government spending. In particular, Quinn wants to raise the individual income tax rate to 4 percent. His Budget Director David Vaught wants to raise both the corporate and individual income tax rate to 5 percent. Here’s what you need to know about these job-killing plans.
- Illinois already places a heavy tax burden on families and businesses. Illinoisans already spend on average 101 days—January 1 through April 11—working to pay their combined tax burden. This makes Illinois the 14th highest in number of days spent working each year to pay federal, state, and local government taxes. Illinois has the 8th-highest state/local sales taxes, 7th-highest property taxes, and 6th-highest gas taxes.
- Families can’t afford to send more to Springfield. Should the governor’s plan pass, the average household will face an increase in their tax bill of $596. Few families have room in their kitchen table budget for higher state income taxes.
- Raising taxes will kill jobs. In the longer run, there will be a much higher economic cost to pay in either lower incomes or fewer jobs. A study from the Illinois Policy Institute found that the 33 percent income tax hike will result in a $1,353 personal income hit for each Illinois household or a loss of over 107,000 private sector jobs.
- Illinois has a spending problem, not a revenue problem. State spending is up 26 percent after inflation over the past 10 years. In 2008, state government received a record amount of revenues—$29.7 billion—from the tax-paying families and businesses of Illinois. State leaders spent every dime and borrowed billions more.
- Waste continues. The Illinois Policy Institute’s 2010 Piglet Book identified hundreds of thousands of dollars in questionable state government spending. Via our transparency website at IllinoisOpenGov.org, we’ve discovered even more examples of non-essential spending by the State of Illinois, including $2,520 on “promotional” hot sauce, $574,759 on registration fees and other conference expenses, and $10,000 on a “Dark Knight” Batman movie gala.
- Spending reforms need to come first. Our state budget is a mess, but no amount of new revenue can fix the underlying problems until structural spending reforms—like a cap on the growth of government spending and pension system reforms—are put into place.
- Tax hikes are politically unpopular. A June 2010 poll commissioned by the Illinois Policy Institute found 62 percent of likely Illinois voters thought the state spends too much money. When asked how to solve this problem, 49 percent said cut important programs while just 34 percent wanted their taxes raised.
- A last-minute, lame-duck tax hike is cowardly. Elected officials should wait until the new General Assembly is seated in mid-January 2011 before voting on big topics like a tax hike.
Remember, your strongest argument is always your personal story. Speak from the heart.
For more information, visit illinoispolicy.org/taxhike.