Illinois is in financial trouble, so there are two realistic options, not mutually exclusive1 – drastically cut spending, or raise taxes. I’m hoping the Illinois legislature is not planning to only raise taxes.
That said, despite all talk about percentage increases and so on, the actual dollar increase is not that jaw dropping, is it? I can’t say I’m angry about it, nor am I planning on moving my business to Indiana or Missouri, or somewhere without state income tax. I like it here.
The morning-after reality was this: The state portion of your personal income tax bill is likely to grow by about two-thirds after Gov. Pat Quinn follows through with his vow to sign legislation enacting big tax hikes.
If state taxes would have cost you $2,000 annually under the old rate structure, it’s likely your bill will now jump to about $3,300.
In Quinn’s first year as governor in 2009, he reported adjusted gross income of $157,122 and shelled out $4,468 in state income tax. If the new, higher rate had been in force, his personal tab would have approached $7,500.
(click to continue reading Illinois taxpayers wake up to new reality: 67 percent hike – chicagotribune.com.)
Digest that for a second, the Chicago Tribune is trying to get worked up over what is probably a few hundred dollars a year.2 What percentage of Illinois residents even make $150,000 a year? If you did, your tax went up a couple thousand dollars. I’m not sobbing. Illinois is still middle-of-the-road as far as state tax levels. Ranked 23rd (South Dakota is 1st, Alaska is 2nd, Wyoming is 3rd, and California is 49th, New York 50th, in a study of fiscal year 2011 tax rates by The Tax Foundation) and is probably going to be lowered, but still respectable.
I mean we all want free cheese, but sometimes it isn’t an option. Plus, if I’m not mistaken, if you submit an itemized federal tax return, you can deduct the tax you paid to the state.
I’m sure there is a bunch of waste in the state budget that I would cut out if I was in control of such things, but I don’t want state mental hospitals to close, don’t want bridges to collapse, CTA trains to be reduced, potholes to remain unfilled, etc.
–update, don’t forget that the Illinois legislature has also tried to bridge the budget gap with the short-sighted Amazon tax bill, as previously discussed.Footnotes:
- and not counting the third option, do nothing and ignore the problem. Illinois does not want to follow the Texas model [↩]
- You can check specifically what the increase will mean to you in this handy-dandy tax hike calculator [↩]