The Problem $3 billion, $5 billion, $10 billion—the talk surrounding impending federal and state tax hikes is downright scary these days. Governor Pat Quinn proposes a 33 percent increase in the state’s individual income tax rate, equal to raising the burden on Illinois taxpayers by a total of $2.8 billion. David Vaught, Governor Quinn’s budget director, promises a 66 percent increase, coming in at $5.7 billion in additional cost. Meanwhile, at the federal level, the end of 2010 marks the expiration of the Bush tax cuts—a series of tax reductions made between 2001 and 2006—set to cost Illinois taxpayers an additional $5.1 billion in higher taxes come 2011.
The sheer magnitude of these amounts can be difficult for taxpayers to put into perspective. But Illinoisans are not removed from the very real, very personal impacts of these massive sums.
Take these realities for example:
Governor Quinn’s $2.8 billion state income tax increase tops the $2.3 billion that Illinois households use to stock their kitchens with dairy products each year.
Illinois childcare providers, making $37,000 annually, would collectively have to send in their entire annual income to government coffers for 13 years to cover the $5.7 billion state income tax increase proposed by Governor Quinn’s budget director.
The $5.1 billion increase in federal income taxes is over three times what every Illinois household spends on life and personal insurance each year.
As Illinois legislators are presented with plans to hike the state income tax and federal legislators ponder the impact of extending the Bush tax cuts, families have to wonder how they’ll make ends meet. $3 billion, $5 billion, $10 billion—these are not insignificant sums.
Our Solution Illinois lawmakers should reject legislative proposals to increase the state income tax. Congress and President Barack Obama should pass and sign a permanent extension of the Bush tax cuts. Why This Works Higher state and federal tax burdens are set to impact Illinois taxpayers in a big way. If the Bush tax cuts expire at the end of 2010 and Illinois sees a 66 percent income tax increase, Illinois taxpayers will face a new $10.8 billion tax burden.
Hiking the burden on Illinois taxpayers will not cure the underlying problem of government overspending. Indeed, revenue generated from state income taxes increased each year from 2003 to 2008, but each year the state budget landed in the red. Likewise, federal spending has gone up significantly, increasing from $25,000 per household to nearly $30,000 in the past three years.
Politicians at the state and federal levels have dodged numerous opportunities to balance budgets through prudent spending reforms. Rather than place a bigger burden on the taxpayer, legislators must balance the budget without tax increases. Illinois citizens have had to make tough decisions at home to adjust to the changing financial times. It’s time our lawmakers hold themselves accountable for balancing state and national budgets by making careful cuts—not by placing the weight on taxpayers.