Illinoisans will receive welcome financial relief this New Year when the state's income-tax rate drops to 3.75 percent, down from 5 percent. This tax relief will save the average Illinois family more than $1,000 in 2015.
In 2011, Illinois Democrats raised the personal income-tax rate by 67 percent in an attempt to improve the state's budget problems. The tax increase was passed as a temporary measure, and was described as necessary to pay down Illinois' backlog of bills, stabilize the state's pension crisis and strengthen its economy.
Since 2011, the state has received more than $31 billion in additional tax revenue from the income-tax hike. Despite this, Illinois state government still has billions in unpaid bills, more than $100 billion in pension debt and one of the weakest economies in the nation.
"The politicians claimed more money would solve the state's problems, but this tax hike proved that the problem in Illinois government was not insufficient revenue - the problem is overspending," said Kristina Rasmussen, executive vice president of the Illinois Policy Institute. "Now that Illinois residents are getting the tax relief they were promised and they deserve, it's time for state government to live within its means. Lawmakers must implement reforms that will drive down the cost of state government."
Below are important facts on Illinois income-tax relief:
· In 2011, during a lame-duck legislative session, Democrat lawmakers and Illinois Gov. Pat Quinn raised the state's flat income-tax rate to 5 percent from 3 percent. The tax increase was passed as a temporary measure. It was the largest tax increase in state history.
· According to the law passed by Quinn and the Democrats, the income-tax rate will be 3.75 percent on Jan. 1, 2015.
· During the spring legislative session and then during the governor's re-election campaign, Quinn and lawmakers attempted to renege on their promise of tax relief by making the 5 percent rate permanent. They failed.
· The average Illinois family will save approximately $1,075 in 2015 because of the state income-tax rate drop.
Some additional details on the tax relief for Illinoisans in the new year is available here.
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