I realize this is a nationwide blog and most of you probably don't care about Illinois - BUT... I'm from Illinois and this hits a lot of us where it hurts - our wallets! The State of Illinois placed a tax hike in place during the last legislative session of the year that will hit both individuals and businesses hard.
The tax increase itself is a major issue with me, however, how it was passed almost made me vomit.
Illinois politicians, who have quite a record of embarrassing moments, didn’t waste any time to have an embarrassing moment in 2011. In the final hours of the lame duck legislative session, Democrats hammered through the biggest single tax increase in state’s history. It was literally passed in the middle of the night prior to seating new elected Republicans.
I google image searched for a picture that would accurately convey my dismay but there is no way corporate would allow me to post it!
For most Illinois residents, this was like waking up to find out that your youngest daughter not only was out after curfew, but that she flew to Las Vegas, got married, and pregnant while you and your spouse were sleeping peacefully. Your youngest was not only out gallivanting the country, but then the government told you they passed a new law that forced you to pay for the trip to Vegas and their gambling.
Not only is it fiscally painful, but it is morally unacceptable. Do you really think it's fair or appropriate to slam a law through when the majority of the state is sleeping? Earth to Governor Quinn???
The income taxes will be raised from 3% to 5% and corporate taxes from 4.8% to 7%. There was not a single Republican vote for the passing of this new law.
This is going to be very challenging for the State of Illinois, already with high employment, to recruit new business to the state. Existing businesses who may have invested into their companies in 2011 will have to make some difficult decisions as to keep the business in the State of Illinois or risk slim to no profits.
The tax hike hits Illinois so hard that even the journalists in California are now reminding their readers that at least they don’t live in Illinois. California Governor Jerry Brown is considering a tax increase that would result to about $1,000 per family.
“The Illinois tax hike hits harder,” states the Sacramento Bee. “The Prairie State has 13 million residents, and overall, the increase amounts to roughly $2,000 for a family of four.”
Illinois’ neighbors are ready for business. Newly elected Governor in Wisconsin, Scott Walker, released this statement.
“Wisconsin is open for business. In these challenging economic times while Illinois is raising taxes, we are lowering them. Already the legislature is taking up bills to provide tax relief to small businesses, to create a job-friendly legal environment, to lessen the regulations that stifle growth and to expand tax credits for companies that relocate here and grow here.”
For example, a 67% tax hike will increase your Illinois income tax bill from $1,000 to $1,667!!
Luckily for you, Liberty Tax is nationwide, so if you live in California or Illinois, we can help you. Make sure you schedule some time with us shortly to help you save this tax season. There are some special credits available on the Illinois state tax return - be sure you consult your local income tax preparation offices in Illinois to get all the deductions you deserve.
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.