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Illinois Tax Increase Means What for the Rest of Us?

illinois tax increase, illinois

Would a tax increase send you over the edge?

The Illinois state legislature passed an enormous tax increase that lawmakers hope will pull the state out of its crushing budget crisis. But the majority vote to raise income taxes from 2 to 5 percent will, according to Babble’s Chicago blogger, Linda Marsicano, leave families with an income of $40,000 paying $800 per year extra.

That’s quite a tax hike — and one that lawmakers in other states are no doubt keeping their eyes on. And one that will no doubt leave even middle class families scrambling if not worse.

But what’s the alternative?

My own state, California, also has notorious budget-balancing problems. The new governor, Jerry Brown, is slashing state spending left and right. The problem with that is education is the No. 1 expense in the state. Schools already bear the scars of recent budget slashes, and now they’re going in for round two (or is it round 20, I’ve lost track).

So I kind of look at a tax increase with a bit of relief. Sure, it would affect my family. But cuts to education do also and in bigger ways: my kids attend underfunded schools. And our main income, from my husband’s job as a college professor, has been cut so many times (and in very creative ways) that a tax increase might be a wash. The same is likely true of the thousands of other state workers, including K-12 teachers, who are forced to take furlough days, etc. At least a tax increase shares the burden with those who work in the private sector.

An $800+ additional annual burden on families is, indeed, a hardship. At a minimum, these kinds of increases should be incremental.

Other budget-challenged states — or, at least, the lawmakers hoping for re-election — will be watching Illinois to try and understand what the fallout of such a drastic increase will be.

For the sake of Illinois families, and mine, my fingers are crossed.

Illinois residents, what’s this going to do to you? What about the rest of the nation: do you think a bump (big bump!) in taxes will pull your states out of their budget messes — or just create more?

Photo:allmanandlee.com

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