Quinn Signs Major Tax Increase into Law
If you live in Illinois, your taxes have now gone up 67 percent. Governor Pat Quinn has signed the income tax package into law.
The government will get a bigger cut of your next paycheck. Illinois' flat income tax rate is now 5 percent, up from 3 percent. Someone making 40 thousand dollars a year will now pay another 800 dollars in state taxes, not counting deductions or federal tax breaks.
It will stay that way for at least four years when the rate is scheduled to go down. The corporate rate jumps from 4.8 percent to 7 percent, with a similar reversion in four years.
Democrats passed the measure in the wee hours Wednesday morning, among the final acts of the lame duck session. The move is meant to help close a $15 billion budget deficit that threatens to cripple state government.
Governor Pat Quinn says Illinois' fiscal house was burning. "We have an emergency, a fiscal emergency," Quinn said. "Our state was careening towards bankruptcy and fiscal insolvency."
The increase is retroactive, covering all wages earned since Jan. 1 of this year.
Republican legislators are already trying to get the law repealed, and governors of other states are lining up to lure Illinois' businesses, upset that the corporate tax rate is also going up.
(Additional reporting from The Associated Press)