The Illinois House wants to roll back the state’s corporate tax increase, but there’s no serious talk of rolling back the personal income tax increase. House Republicans filed a measure to cut the corporate tax from 7 percent, what it was raised to in January, to six percent in 2013. It would go down to 4.8 percent in 2014, the level it was before the increase. House Minority Leader Tom Cross (R-Oswego) says his party wants to roll back the temporary personal income tax increase, but it’s unrealistic.
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“We have to work within the confines of a system we don’t control. We don’t like that, but we recognize that,” Cross said. “So our approach, we think, helps create an environment that will create jobs.” The bill also provides corporate tax relief in the event of a continued increase in the state’s unemployment rate, and it would take effect immediately. The rate would be reduced by .25 percent each time the unemployment rate increases by .3 percent over a four month span. So the corporate tax rate would decrease from 7 percent to 6.75 percent should the unemployment rate rise from 10 percent in January to 10.3 percent in April. Senate Minority Leader Christine Radogno (R-Lemont) issued a statement on the House Republicans’ plan. “We’re hopeful the House effort is successful and we’ll have the opportunity to repeal the tax increases that are driving jobs out of Illinois and hurting families. Our similar efforts in the Senate have so far fallen on deaf ears. But perhaps, with the spotlight now clearly shining on the failure of the Democrats’ tax increases and fiscal management, they will join with us to take a comprehensive look at Illinois’ tax structure, business regulation and over-spending.” Cross warned passage of the proposal will require spending cuts, as a one percentage point drop in the corporate income tax rate means the state loses $400 million. Some Democrats, many soon up for election, filed a measure to eliminate the entire corporate tax increase effective January 1st 2012, which would mean it has to pass the House and Senate with a supermajority within the next two weeks. It’s unclear if that’s on the table.