Escape From Chicago! Personal Taxes Increase 32%, Corporate Tax Rates Rise From 7.75% To 9.5%

The Illinois House of Representatives suceeded in overriding the Illinois governor’s veto of the staggering state budget of $36 billion complete with tax increases. Personal state taxes will rise 32% and corporate income taxes will rise from 7.75% To 9.5%.

But despite a 32% income tax hike, the budget package is devoid of any structural spending reforms to slow growth in the cost of government: It lacks comprehensive property tax reform, major pension reform, collective bargaining reform, reforms to Medicaid and more.

The primary cause? Out of control public pensions.

Pensions will consume about a quarter of Illinois’s general fund this year. Nearly 40% of state education dollars go toward teacher pensions, and the state paid nearly as much into the State Universities Retirement System last year as it spent on higher education.

Anemic revenue and economic growth can’t keep up with entitlement spending. The state’s GDP has ticked up by a mere 0.8% annually over the last four years compared to 2% nationwide and 1.4% in the Great Lakes region. Since 2010 more than 520,000 Illinois residents on net have fled to other states.

Way to go, Illinois!

But Cook County leads Illinois in out-migration. Maybe they should change their name to “Cooked” County.

 

 

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