Illinois income tax increased 66 percent during budget crisis

The Illinois tax increase of 66 % was approved right before a new assembly was sworn in Wed. The state of Illinois, reeling from many years of fiscal mismanagement, is trying to find solutions to narrow a $15 billion spending budget deficit. Illinois has passed the largest one-time tax hike in the state's history, a measure other states with comparable budget difficulties have avoided so far. {Illinois is trying their hardest to stay away from installment loans|The state is trying their hardest to stay The state is attempting their hardest to stay away from payday loans. Article resource – Illinois lawmakers approve largest tax increase in state history by MoneyBlogNewz.

All about the Illinois tax increases

A state is able to work on its budget quite a bit with the tax increase in Illinois. There will be a 2 percent limit on spending increases while also giving a 3 to 5 percent new income tax that is temporary.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. A ton of democrats were lost in the last election meaning a ton of Republicans who don't support the Illinois tax increase were put into office with the last election.

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. There is an $8.7 billion installment loan that needs to get paid off still. It was not accepted for an increase of taxes for that either. Overdue bills that businesses and social service agencies need would have been paid with the loan. There was a statement made by Democratic Governor Pat Quinn's office. They said over $6.8 billion a year would be raised with the tax increase. There will also be a 2 percent cap on spending growth. If that limit is breached the Illinois tax increase is automatically nullified.

How the people will be impacted by the tax increase in Illinois

There will be an increase to 5 percent with the Illinois income tax increase. In the state's history, a tax increase this large hasn't happened before. 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. In 2015 the rate drops to 4 percent and that taxpayer’s liability drops to $1,333. The additional tax revenue will balance the state’s budget, but Republicans call it a job-killing hoax that will become permanent.

Information from

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