Illinois Tax Increase Sparks Reactions
By Arnab Ghosh, Gaea News NetworkThursday, January 13, 2011
SPRINGFIELD (GaeaTimes.com)- Faced with a huge budget deficit, Illinois resorted to a significant hike in Corporate tax and Income tax. This hike comes at a time when the economy of the state is still grappling with the ripple effect of economic recession. Prodded by the democrats ruling state the state legislature gave its nod to a whopping 67% rise in the income tax of the state and 45 % rise in Corporate tax. On an average the new tax will add over $1000 to the tax amount paid by a family of 4 earning approximately $60000 per year. The detractors of the rise have argued that such a drastic tax increase may prompt the residents and businesses to opt for living in other states in USA. It may also hamper the political prospect of the Democrats in 2012.
There was an indication from Pat Quinn the democratic governor of the state earlier that a hike in taxes might be imposed on the state. The earlier measures adopted by the state to address the fiscal crisis have proved to be inadequate. The Illinois governor said in his speech defending the bill “The state was careening toward bankruptcy, fiscal insolvency”. As expected the GOP blasted the bill saying the tax increase will not be of help in the long run.
The tax increase in Illinois will help in closing a budget gap estimated at $13 billion which could rise to $17 billion in the next year. In both the House and senate no GOP members voted for the tax hike. The GOP is up in arms against the rise just like some Democrat hardliners are adamant about it.
