Friday, July 8, 2011

Tax Hike Drives Illinois Revenue Growth

By Benjamin Yount, Illinois Statehouse News
It was more taxes in Illinois instead of more jobs that brought in about $1 billion more in State revenue in 2011, according to a new report.

The Commission on Government Forecasting and Accountability, or COGFA, a legislative budgeting division, reports that personal income tax revenue grew more than half a billion dollars in fiscal 2011 to $1.3 billion. Corporate tax revenue climbed to $403 million, a $147 million increase. That works out to 67 and 57 percent hikes, respectively.

The bulked up collections in personal income tax revenue mirror the 67 percent rate increase. The 57 percent collected in corporate income tax revenue is actually more than the 47 percent corporate income tax increase approved earlier this year.

The COGFA report points out that money collected from the state's sales tax grew lots more than expected, too. Sales tax revenue jumped from $6.3 billion in 2010 to more than $6.8 billion in 2011. The increase mostly comes from the spike in prices at the gas pump from earlier in the fiscal year.

Kristina Rasmussen, executive vice president with the Illinois Policy Institute, advocate for large cuts in state spending and sweeping changes in tax policy, said taxpayers are getting rooked. "Revenue collections are up thanks to the tax hike, but it's at the expense of Illinoisans who are paying a week's wages in extra taxes this year," said Rasmussen. "To make matters worse, those extra tax dollars are financing pension and debt costs, not additional services."

The median income for a family in Illinois in 2009, the most recent year available, was $53,974 according to the Census Bureau. The new 5.25 percent income tax rate has that family paying more than $2,800 in income tax.

You can read Ben's full report at: http://illinois.statehousenewsonline.com/6562/tax-hike-drives-illinois-budget-growth/

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