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Taxes raised 

By Jim Killebrew

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[June 11, 2014]  For the people of Illinois I have a question: “At what point do you say enough is enough?”

The state Democrat controlled General Assembly and the Democrat Governor enacted a 66% increase in your personal income tax, from 3 percent to 5 percent, and a business and corporate tax increase from 4.8 percent to 7 percent. That tax has been in effect for the past couple of years and is set as a temporary tax that will expire in January 2015. It has become a hot issue in the current election cycle that will end with the election of a new Governor or the current Governor who raised the taxes being re-elected. Although the Governor is running on making the temporary tax increase a permanent increase, the General Assembly members would not support his proposal, even his fellow democrats. That is, at least until after the November election. So now, of course, the only ideas the Governor seems to have is how he can find new taxes to fuel his enormous spending habits. These taxes have deleterious effects on the typical, hard working family.

For a family of four whose gross paycheck amounts to $40,000 per year the current state income tax has been $1,200. With the passing of the new increase in state income tax the same family of four will now pay $2,000 per year. That represents about $67 per month less the family of four has on which to live.

When one considers the new tax increase to 7 percent on business and corporations, it also will impact on that family of four even further. If the business or corporation is providing a service or making a product there is a strong likelihood that the tax increase will be passed on to the customer. In which case for all goods and services the family purchases during the year the cost will increase the 2.2 percent above what the cost of the goods and services cost last year. That increase for goods and services will be paid from the family’s net money, not the gross.

When these two tax increases are combined and added to the tax that the family of four already pays it takes a huge bite out of the family’s paycheck. The federal tax deduction from each paycheck will be at least 3.6 percent, FICA at least 6.2 percent, Medicare at least 1.4 percent and the current state tax at 3 percent. Together these already account for 14.2 percent of the family’s total gross paycheck. Adding the increase for the state it moves to a total of 16.2 percent taken from the gross pay, and then an additional 2.2 paid out from the family’s net pay. The $40,000 is reduced to $33,520 even before the family sees the bi-monthly paycheck. With another corporate and business tax passed on to the consumer at 2.2 percent, the family’s net pay is reduced again by $737 down to $32,783.

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So the family of four, who thinks they have the spending power of $40,000 per year, actually has only $32,783. Suppose the family of four owns a small, modest house. Depending on the assessed value of the house, it is not unlikely that property taxes will amount to roughly $2000 for the year. The family’s net income is reduced to $30,783 after the property tax is paid. The property tax for the family represents about 6.1 percent of their annual net pay. The effect of that tax results from the $40,000 gross reduced to $30,783. In taxes alone the family of four has reached almost 25 percent of their annual income.

Remember, the $30,783 is a net income that is used to pay bills, buy food, educate the children, buy clothes, gasoline and all other things to just live life. Remember, however, from the net income anything that is bought will include a tax as a portion of the total. Just for fun the next time a utility bill is paid, look on the bill and record the amount of tax that is charged. The telephone bill has a tax levied. The gasoline has a tax from the state government. The next time groceries are purchased, check out the amount of tax that is paid to the state. In fact, anything that is purchased will be taxed; any service that is purchased will be taxed. License plates for cars, driver’s license, and hunting license, anything purchased will have a tax attached to it by the local, state and federal governments.

The fact is, every time a dollar bill changes hands from a consumer for products or services the government collects a tax on it. If you change the oil in your car you pay a tax on the service and the oil. The service station pays a tax on the oil they purchase and then charge a tax when you purchase from them. Over the years the government has found a way to tax just about everything that exists.

Municipalities, states and federal governments have discovered ways to make laws, create regulations, ordinances and requirements to levy a tax for everything one uses in life. It is taxed over and over by various levels of government. Taxes are deducted throughout the year by the government from each paycheck of the citizens. It is used interest free by the government throughout the year with a final accounting from each citizen to make sure all income taxes are paid for a final accounting by April 15 each year.

Again, with the taxes being levied by the governments of our land from the gross pay and the net pay that approaches, or perhaps even exceeds the 50 percent level, how long will it be before citizens say enough is enough and demand that deficits be reduced by reductions in spending rather than continuing to raise taxes?


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