Te amily budget shrinks when lawmakers increasetaxes. With “axmageddon” on the horizon, the ederalgovernment is looking to squeeze $3,452 in higher taxesrom Illinoisans, which comes in the orm o expiringtax cuts and new taxes under ObamaCare.
Tis is, o course, on top o the state’s record 67percent income tax hike on Illinoisans in 2011, whichcosts amilies one week’s pay each year.
Te increased revenue rom the 2011 tax hike wassupposed help Illinois get its scal house in order andpay down its overdue bills. Instead, additional revenuesueled the state’s habitual overspending and allowed itto dodge structural reorms.Illinois’ economic and scal condition worsenedaer the tax hike. Unemployment is outpacing thenational average, with nearly 600,000 Illinoisanslooking or work.
Illinois’ stack o unpaid bills is now atroughly $8.5 billion.
And the state’s ununded pensionliabilities have skyrocketed to more than $200 billion.
Te tax hike ailed.
$3,452 in 2013
Taxmageddon: Expiring tax cuts
and ObamaCare’s new taxes
$625 in 2015
Progressive tax vs. 2015 sunset rate of 3.75%
Instead o improving Illinois’ scal ooting, Gov. Quinncontinues to aunt his disconnect with economicreality: he’s already planning another multi-billion dol-lar tax hike. Passing a progressive income tax is “one o my goals beore I stop breathing,” Quinn said.
Advocates or a progressive tax argue that it would only increase taxes on the super wealthy. Tis is ar romthe truth. A closer look at a tax hike plan pushed by a union-unded liberal policy group shows why. Teirprogressive tax plan would increase taxes on 85 percento lers in Illinois.
In act, in 31 o the 34 states with progressive incometax structures, a amily o our with a taxable incomeo $50,000 is taxed at a higher rate than what Illinoiswill tax amilies under its at tax aer the rate hikepartially sunsets to 3.75 percent rom 5 percent in 2015.
Specically, the progressive income tax would increasethe tax bill or this amily o our by $625 in 2015. Makeno mistake; a progressive income tax would increasethe tax bill or Illinois’ middle class.o make things worse, it would also destroy jobs andsap economic activity.Quinn and other advocates or tax increases don’tunderstand that taxing the little money amilies havele at the end o the month will not solve Illinois’ direscal problems. Worse, causing urther cuts in theamily budget will only give people another reason toleave the state.Illinoisans shouldn’t be orced to contribute less totheir church, save less or retirement or invest less ineducation.Tese cuts can and should be avoided. Instead o orcing amilies to make dicult cuts, state leadersshould allow amilies to keep more o what they earn.Lawmakers must put taxpayers rst by cutting spendingand cutting taxes.
is the Senior Budget and ax Policy Analyst at the Illinois Policy Institute. Te Illinois Policy Institute’s Fact Finder series aims to debunk myths about pub-lic policy issues that afect Illinois.
Potential taxes coming your way