SPRINGFIELD - If you're able to tuck away $1,125 by skipping Starbucks and walking more in 2017, looks like that money won't be safe, because the Illinois Senate Democrats voted Tuesday to hike the average Illinois family's taxes just that much in 2017.
Here's the scoop from the Illinois Policy Institute:
The Illinois Senate passed a series of tax hikes May 23 that will raise more than $5.4 billion in new tax revenue. Senate Bill 9 hikes income taxes, expands sales taxes, and increases franchise taxes.
The tax hikes are part of a record $37 billion budget that the Senate also passed May 23.
The Senate approved the tax hike bill by a 32-26 margin, with no Republicans voting in favor.
SB 9 does the following:
- Hikes personal and corporate income taxes by $5 billion. The personal income tax rate increases to 4.95 percent from the current 3.75 percent rate. The corporate income tax rate rises to 7 percent from 5.25 percent.
- Expands the sales tax to laundry and dry-cleaning services, as well as storage and other services to bring in $55 million.
- Raises $54 million in cable and satellite TV taxes.
- Closes corporate loopholes worth $125 million.
The total $5.4 billion tax hike means each Illinois household will eventually have to pay $1,125 in additional taxes annually.
Under the Democrats’ plan, new taxes will apply to many services previously untaxed. And because the Senate has failed to pass a property tax reform package, Illinoisans will continue to see their property taxes – the nation’s highest – go up even more.
Because the income tax hike is retroactive to Jan. 1, 2017, personal income taxpayers will pay an effective tax rate of 5.81 percent on their earnings for the remainder of the year.
More on the bill that passed the Illinois Senate with no Republican votes HERE.
