Illinoisans could be sending several billion dollars more to the state if a personal income tax increase passes out of the lame-duck legislative session.
Plans for a tax hike being floated in Springfield range from temporary to permanent and from a 1-to-2-percentage point increase.
A 2-percentage point income tax increase, which amounts to taxpayers handing over 66 percent more to the state, would bring in more than $6 billion additionally each year to state coffers, according to Kelly Kraft, spokeswoman for the Governor's Office of Management and Budget. She said a 1-percentage point increase would generate about half that, or $3.1 billion.
Gov. Pat Quinn has mentioned borrowing $14 billion to cover the state's debts and adding an additional tax increase to cover the debt payments. For every quarter percent jump in the income tax, the state brings in about $700 million, Kraft said.
The personal income tax is currently set at 3 percent. What the median Illinois household would owe under an increase depends on the wording in the actual legislation, according to Larry Joseph, budget and tax expert for the advocacy group Voices for Illinois Children.
"It would depend on whether all there was was a rate increase or whether there were any changes in tax credits or tax exemptions," <> Joseph said.
The Illinois Senate approved a two-percentage point increase in 2009, but it never came to a vote in the Illinois House of Representatives. It included several tax breaks to make it easier on low- to middle-income families.
"Nobody likes tax increases - in fact, tax increases are the blunt instruments of politics. They are used that way politically," said Ralph Martire, executive director of the Center for Tax and Budget Accountability.
Quinn has been in contact with the four legislative leaders to discuss a possible tax increase.
"Conversations have been very productive, and many different options are being discussed," said Annie Thompson, a Quinn spokeswoman.
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