A lame-duck Illinois state assembly on Wednesday authorized a 66 % income tax increase. The state of Illinois, reeling from many years of fiscal mismanagement, is searching for solutions to slim a $15 billion budget deficit. The Illinois income tax increase, the largest within the state’s history, is a desperate step to solve budget woes numerous other states with a similar problem continue to keep away from. {The state is trying their hardest to stay from installment loans|The state is trying their hardest to stay frompay day loans.
Illinois tax increase survives 11th-hour vote
A state is able to work on its budget quite a bit with the tax increase in Illinois. A temporary increase in the Illinois income tax from 3 to 5 percent will be combined with a 2 percent limit on spending increases.Right before the new Illinois General Assembly was sworn in at noon, the bill was passed even though Republicans said they'd never vote on the measure. Because of the last election, Illinois is losing a ton of Democrats which means majority is changing. Now, legislators who don't support the Illinois tax increases are going to be in charge.
Ideas for the Illinois budget crisis to get fixed
The Illinois income tax increase was adopted after several other proposed taxes were rejected by Republican lawmakers. One idea was that school districts could be funded by adding $1 to every pack of cigarettes. That didn't go over so well. It was also not accepted for taxes to help pay off the $8.7 billion installment loan. The businesses waiting to get paid would be what the loan was used for. Social service agencies would also see some of the money. Democratic Governor Pat Quinn’s office said the Illinois tax increase will raise $6.8 billion a year. There will also be a 2 percent cap on spending growth. If that limit is breached the Illinois tax increase is automatically nullified.
The effect the Illinois tax increase will have
The largest tax increase in the state's history is about to happen with an increase to 5 percent with the Illinois income tax increase. Other Midwestern states have higher taxes still. Iowa has a 6.4 percent tax rate while Wisconsin is at 7.5 percent and Missouri is 6 percent. Many that used to pay $1,000 now pay $1,666 with the tax increase in the state's income tax. The rate will drop down to 4 percent, or $1,333, in 2015. The additional tax revenue will balance the state’s budget, but Republicans call it a job-killing hoax that will become permanent.
Articles cited
Associated Press
news.yahoo.com/s/ap/20110112/ap_on_bi_ge/us_illinois_taxes
Fox News
foxnews.com/politics/2011/01/12/ill-lawmakers-pass-percent-income-tax-increase/
Reuters
reuters.com/article/idUSTRE70A6GP20110112
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