From: Dem Tax Plan Will Punish Business for Success

June 14, 2013

While busy failing to pass pension reform or cut spending this past legislative session, some leading Democrats in the General Assembly found time on the last day of the Spring session to make a bad piece of legislation even worse.  I’m referring to the proposed constitutional amendments, SJRCA 40 and HJRCA 33, seeking to change the Illinois Constitution to impose a graduated income tax on both personal and corporate income.

That means the more success a business or family enjoys the more money the government will take.  Not only will this penalize success, it sends the clear message to businesses and individuals that Illinois does not want them to succeed here, nor does it want them to grow their business in the Land of Lincoln.  Instead of proposing to just penalize the success of individuals, Illinois politicians want to penalize our state’s most profitable employers likely driving jobs away in a state where unemployment is already nearly two points higher than the national average

Illinois currently levies two forms of income tax, personal and corporate, both at a flat rate and hiked by the General Assembly in the dead of night during the final day of a lame duck session in 2011. Personal income taxes were raised by 67% and corporate income taxes by 46%.  This past January, state Representative Naomi Jakobsson (D-Champaign) introduced a constitutional amendment to shift the way Illinois taxes personal income from a flat tax to a graduated tax. Then on the last day of the Legislature’s regular spring session, Sen. Don Harmon and Rep. Jackobsson introduced new Constitutional amendments that would remove any distinction between the corporate and personal income tax rates, while taxing them on a graduated basis

As Reboot Illinois correctly pointed out in their editorial last week, there are no rates included in this proposal nor have the bill sponsors detailed any separately, although Rep. Jakobsson did state her opinion that “we’re a pretty low-taxed state.”  Fortunately, the leading voice promoting the progressive income tax, the Center for Tax and Budget Accountability, has put forth a plan for progressive marginal tax rates in Illinois ranging from 5% to 11%.  Under this plan, a family earning between $5000 and $100,000 annually would pay a 5% marginal tax rate; a family earning $100,000 to $150,000 would pay 7.5%; these rates continue upward until the people earning over $1 million would pay a rate of 11%.

With the inclusion of corporate income in the recently introduced amendment, under this plan even modestly profitable corporations would be taxed at a rate of 11%. When the 2.5% Personal Property Replacement Tax is added in for a total corporate tax rate of 13.5%, Illinois would have the highest corporate tax rate in the nation and one of the highest in the industrialized world.

Illinois state government is already collecting more tax revenue than at any other time in its history, yet our leaders cannot get its fiscal house in order.  Why should taxpayers and businesses give more of their income to a group that refuses to control spending and fails to address the state’s largest fiscal calamities like pension liabilities?

The inclusion of corporate income in the new progressive tax constitutional amendments betrays a disturbing contempt for job creators located in Illinois.  In a state that badly needs jobs and economic activity- and the increased tax revenue that comes with it, this proposal will only serve to drive jobs away.  Changing the Illinois Constitution to levy a progressive tax on personal income is a bad idea that will hurt Illinois families; changing the Constitution to also levy a progressive tax on corporate income is one of the few ways to make that proposal even more harmful to Illinois’ economic future and Illinois families.

David W. From is the Illinois State Director for Americans for Prosperity, a non-profit organization advocating for economic freedom.

To view this op-ed at Reboot Illinois click here: http://rebootillinois.com/?opinion=4028

While busy failing to pass pension reform or cut spending this past legislative session, some leading Democrats in the General Assembly found time on the last day of the Spring session to make a bad piece of legislation even worse.  I’m referring to the proposed constitutional amendments, SJRCA 40 and HJRCA 33, seeking to change the Illinois Constitution to impose a graduated income tax on both personal and corporate income.

That means the more success a business or family enjoys the more money the government will take.  Not only will this penalize success, it sends the clear message to businesses and individuals that Illinois does not want them to succeed here, nor does it want them to grow their business in the Land of Lincoln.  Instead of proposing to just penalize the success of individuals, Illinois politicians want to penalize our state’s most profitable employers likely driving jobs away in a state where unemployment is already nearly two points higher than the national average  

Illinois currently levies two forms of income tax, personal and corporate, both at a flat rate and hiked by the General Assembly in the dead of night during the final day of a lame duck session in 2011. Personal income taxes were raised by 67% and corporate income taxes by 46%.  This past January, state Representative Naomi Jakobsson (D-Champaign) introduced a constitutional amendment to shift the way Illinois taxes personal income from a flat tax to a graduated tax. Then on the last day of the Legislature’s regular spring session, Sen. Don Harmon and Rep. Jackobsson introduced new Constitutional amendments that would remove any distinction between the corporate and personal income tax rates, while taxing them on a graduated basis

As Reboot Illinois correctly pointed out in their editorial last week, there are no rates included in this proposal nor have the bill sponsors detailed any separately, although Rep. Jakobsson did state her opinion that “we’re a pretty low-taxed state.”  Fortunately, the leading voice promoting the progressive income tax, the Center for Tax and Budget Accountability, has put forth a plan for progressive marginal tax rates in Illinois ranging from 5% to 11%.  Under this plan, a family earning between $5000 and $100,000 annually would pay a 5% marginal tax rate; a family earning $100,000 to $150,000 would pay 7.5%; these rates continue upward until the people earning over $1 million would pay a rate of 11%.

With the inclusion of corporate income in the recently introduced amendment, under this plan even modestly profitable corporations would be taxed at a rate of 11%. When the 2.5% Personal Property Replacement Tax is added in for a total corporate tax rate of 13.5%, Illinois would have the highest corporate tax rate in the nation and one of the highest in the industrialized world.

Illinois state government is already collecting more tax revenue than at any other time in its history, yet our leaders cannot get its fiscal house in order.  Why should taxpayers and businesses give more of their income to a group that refuses to control spending and fails to address the state’s largest fiscal calamities like pension liabilities?

The inclusion of corporate income in the new progressive tax constitutional amendments betrays a disturbing contempt for job creators located in Illinois.  In a state that badly needs jobs and economic activity- and the increased tax revenue that comes with it, this proposal will only serve to drive jobs away.  Changing the Illinois Constitution to levy a progressive tax on personal income is a bad idea that will hurt Illinois families; changing the Constitution to also levy a progressive tax on corporate income is one of the few ways to make that proposal even more harmful to Illinois’ economic future and Illinois families.

David W. From is the Illinois State Director for Americans for Prosperity, a non-profit organization advocating for economic freedom.

– See more at: http://rebootillinois.com/?opinion=4028#sthash.7fz1lX8J.dpuf

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