Thursday, January 13, 2011
Jubilation has broken out in the Midwest—or at least in Wisconsin and Indiana, now that Democrats in neighboring Illinois have rushed their tax increase into law.
Late Tuesday night, Democrats in the Illinois house and senate rammed through Governor Pat Quinn's 67% hike in the state income tax and a nearly 50% jump in the state corporate tax. The increase will add $1,400 to the average family's tax bill, and we doubt it will help job creation in a state that has lost 374,000 jobs since 2008.
New Wisconsin Governor Scott Walker immediately rolled out a press release inviting Illinois businesses to decamp to the Badger State, contrasting his agenda to reduce taxes and welcome business with the Illinois increase. Indiana Governor Mitch Daniels added: "We already had an edge on Illinois in terms of the cost of doing business, and this is going to make it significantly wider."
That's for sure. Small businesses will pay the new 5% income tax rate, up from 3%, and the effective corporate tax rate will rise to 9.5%, which, when combined with the federal rate of 35%, will make the Land of Lincoln one of the most expensive places in the world to conduct business.
- Bloomberg, Illinois's Record Income-Tax Increase Divides Businesses and Investors
- Christian Science Monitor, Why Illinois Lawmakers Passed 66% Income-Tax Hike
- CNN, Illinois Tax Hikes Will Hurt Companies
- L.A. Times, Illinois Gov. Pat Quinn Delighted With Whopping 66% Income Tax Hike
- New York Times, Questions Persisting as Illinois Raises Taxes
- Reuters, Illinois, a Kleptocracy in Action
- Tax Foundation, Illinois Approves Sharp Income Tax Increase, Third-Highest Corporate Tax Rate
- Tax Foundation, Illinois Tax Increases Will Undermine Job Growth and Economic Recovery
- Tax Update Blog, Illinois Jacks Up Income Tax; Still Broke
- Wall Street Journal, Illinois Braces for Tax Increases
- Wall Street Journal, Wisconsin 1, Illinois 0: With Springfield Raising Taxes Amidst its Fiscal Disaster, the New Republican Governor of the Badger State Is Telling Illinoisans, "Escape to Wisconsin"