On anniversary of state tax hike, Mitchell calls for repeal

[January 13, 2012]  DECATUR -- Wednesday marked the anniversary of House passage of Illinois' massive income tax increase. State Rep. Bill Mitchell, R-Forsyth, has again called for the repeal of the tax hike.

In January 2011, Senate Bill 2505 (P.A. 96-1496) raised the individual income tax by 67 percent (from 3 to 5 percent) and the corporate rate by 46 percent (from 4.8 to 7.0 percent). With this added to the existing 2.5 percent corporate personal property replacement tax, Illinois businesses are paying one of the highest corporate tax rates in the nation.

"This tax increase is a jobs killer," Mitchell said. "The Democrats took nearly $7 billion out of Illinois' economy. We've lost 60,000 jobs, and our state's double-digit unemployment rate has gone up nearly a point in the last year. Just today, ADM announced plans to reduce its global workforce by 1,000 positions, including an undetermined number of jobs here in Decatur. The bottom line is simple: higher taxes equal fewer jobs."

With Illinois' unemployment rate sitting at the 10 percent mark, it has a higher unemployment rate than all of its surrounding states, with Indiana at 9.0 percent; Iowa, 5.7 percent; Kentucky, 9.4 percent; Missouri, 8.2 percent; and Wisconsin. 7.3 percent.

The largest tax increase in Illinois history has done little to resolve the state's fiscal crisis. Illinois has a $7 billion backlog of unpaid bills, and Medicaid and other costs continue to soar. Just last week, Moody's Investors Service downgraded Illinois' credit rating, which will force the state to pay higher interest costs when borrowing money.

Mitchell is very concerned about the impact the tax increase is having on small businesses.

"Illinois has nearly 250,000 small businesses that are S corps, meaning they pay taxes at the 5 percent individual income tax rate," Mitchell said. "While the Democrats bail out Chicago corporations with huge tax breaks, our small businesses are getting hit with a 67 percent tax hike. Illinois is doing nothing to help these job creators, which is very troubling to me."

The lawmakers reiterated their support for legislation that would repeal the Democrats' tax hike. House Bill 175, co-sponsored by Reps. Adam Brown and Bill Mitchell, would repeal the tax increase and return Illinois' income tax rate to 3 percent for individuals and 4.8 percent for corporations.

[Text from file received from Rep. Bill Mitchell]