The Tax Foundation is giving Illinois a better ranking this year in its assessment of how states’ tax structures impact business climates. Illinois moved up from 31st to 23rd this year because the state’s temporary income tax hike was allowed to expire after four years.
In January 2011, Democrat leaders forced through a temporary hike in the individual and corporate income tax rates. The temporary increase was supposed to be used to address the state’s pension crisis and start paying down Illinois’ staggering pile of unpaid bills.
The increase generated more than $32 billion over the four-year period, but under Democrat control during that time, the state’s fiscal problems remained. Today, the state’s pension debt is $132 billion, the credit rating has been downgraded several times, and unpaid bills are estimated at more than $7 billion (expected to grow to $8.5 billion by the end of the year).
The combined corporate income tax rate now stands at 7.75 percent, and the individual income tax is 3.75 percent.
Senate Republicans say the key to boosting revenue in the state is making structural reforms to state government and creating a better business climate so more jobs are created and the state’s economy moves forward.
To see more: http://taxfoundation.org/article/2016-state-business-tax-climate-index