A proposal by the Illinois House speaker to cut the state’s corporate income tax may not be a cure-all for Illinois’ job growth woes – but it couldn’t hurt. That’s the assessment of Dan Long, head of the state’s Commission on Government Forecasting and Accountability. He was asked about the corporate tax cut plan during an Illinois House committee hearing on tax policy in Springfield.
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“While states that lowered their tax rates tended to have better unemployment rates and rates of job growth than states than increased their tax rates, it would be premature to simply blame these differences on one sole factor of higher tax rates,” said Long. Long went on to say it wouldn’t be detrimental to cut the corporate income tax but added it wouldn’t guarantee an uptick in job growth.
House Speaker Mike Madigan (D-Chicago) is proposing a cut in the corporate tax rate from 7 percent to 3½ percent, characterizing this as cutting the tax in half. However, the personal property replacement tax, which is assessed based on corporate income, would remain as-is at 2½ percent, so the combined rate would fall from 9½ percent to 6 percent.