Saturday, June 24, 2017

This is Illinois SB9 Tax Increase

This was copied from www.illinoispolicy.org.  It's a concise look at the SB9 tax increase:

SB 9 does the following:
 

Hikes personal and corporate income taxes by $5 billion. The personal income tax rate increases to 4.95 percent from the current 3.75 percent rate. The corporate income tax rate rises to 7 percent from 5.25 percent.

(This is a 1.2% increase)

Expands the sales tax to laundry and dry-cleaning services, as well as storage and other services to bring in $55 million.

Raises $54 million in cable and satellite TV taxes.

Closes corporate loopholes worth $125 million.

The total $5.4 billion tax hike means each Illinois household will eventually have to pay $1,125 in additional taxes annually.

Under the Democrats’ plan, new taxes will apply to many services previously untaxed. And because the Senate has failed to pass a property tax reform package, Illinoisans will continue to see their property taxes – the nation’s highest – go up even more.

Because the income tax hike is retroactive to Jan. 1, 2017, personal income taxpayers will pay an effective tax rate of 5.81 percent on their earnings for the remainder of the year.


(This is a 2.06% increase)

It’s not clear what reforms might come with the tax hike since the Senate decided to break apart the so-called “grand bargain” budget legislation last week. Previously, the Senate had hoped to package as many as 13 bills together, meaning that if one bill did not pass, the entire package would fail.

Now, the Senate is voting on bills separately. That means it’s difficult to know what spending reforms, if any, will be part of the $5.4 billion tax hike or the budget.

But the fact that the Senate plans to spend a record $37 billion and to collect $5.4 billion in new taxes means Illinoisans can expect little in the way of reforms.



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