The president of a central Illinois appliance chain says tax rate uncertainty makes small businesses think twice before creating jobs or expanding.
Dick Van Dyke Appliance World President Dennis Rieken said leaving it open ended makes it tough for businesses to budget or take risks “for example to expand your business, to hire more people, to open more locations.”
“Businesses are very risk sensitive,” Rieken said.
Click here for summary
Illinois currently has a flat rate income tax. A proposed constitutional amendment would change that to allow for a graduated tax and lawmakers would set the tax rates separately.
Democratic state Rep. Lou Lang said it’s not good public policy to make the rates part of a constitutional amendment because changing the constitution is difficult.
“There’s no reason that the Illinois General Assembly can’t make these decisions as we move forward,” Lang said.
Rieken said a progressive income tax punishes success and could drive businesses out of the state. Dick Van Dyke Appliance World has four stores in Central Illinois.
Lang responded to the business community’s concerns about uncertainty.
“There’s a lot of things uncertain in this world. Every law we have on the books in the state of Illinois can be changed,” Lang said. “There’s no intent to pass this for the simple reason to try and change it again in the future.”
Progressive tax sponsor Democratic state Sen. Don Harmon said rates are already set by the legislature and lawmakers don’t take tax changes lightly.
“I don’t think the General Assembly will be making those changes cavalierly,” Harmon said.
The last income tax change was at the beginning of 2015 when it dropped down to 3.75 from 5 percent. The graduated tax rates would range from 3.5 percent to 9.75 percent. It is expected to generate $1.9 billion in new revenue.