Sunday, January 30, 2011

Temporary Income Tax in Illinois

When does the madness stop or is it just starting?  The Illinois State Legislature is playing Obama Poker with their citizens.
I have family members in Illinois that will be affected by the proposed massive tax increase passed by the state House of Tuesday, January 11, 2011. Individual income tax is expected to increase to 5% from 3% and corporate tax to 7% from 4.8%. (For all those who cut Algebra class, that's an additional $1,000 tax on $50,000 income.) I believe this is expected to be a "temporary" tax increase to help the state get out of a $13 billion deficit. It is expected to pass early today in the Illinois Senate. Maybe my family will finally decide to move closer to home?
Living in Pennsylvania I am well aware of "temporary" tax increases. One of our most publicized taxes is the Johnstown Flood tax in response to the 1936 flood. It was created to help clean up and aid the affected flood victims. Initially the tax imposed a 10% duty on all alcohol sold in the state. In 1963, the tax increased to 15% and then 18% in 1968. Additionally, we also have to pay our state sales tax of 6% on top of the Johnstown Flood tax. Approximately 75 years later, the "temporary" tax collects around $200 million annually that goes into the general fund. It is no longer used to help the victims of the flood. I am curious though, how many of the victims affected by the Jamestown flood are still alive today?
If I was a descendent of the Jamestown flood victims, I would demand restitution to get what is rightfully mine. Why not? It's not my fault that my ancestors choose to live on a well-known flood plain especially since it only happened in 1894, 1896, 1907 and 1924.
Good luck, Illinois. There is nothing "temporary" about tax increases. Learn to cut spending and take a serious look at the growing entitlements that risk bankrupting your state. Just to let you know, Governor Brown (D) of California is proposing to extend the "temporary" sales and income taxes and cut services to help get them out of their own entitlement quagmire. I suppose that California will be playing Obama Poker soon too.

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