Income Tax Increase Proposal Defeated In House

(Posted 4/10/2008)- Springfield, IL…A proposal to increase income taxes without providing property tax relief and a clear specific plan of how the $3 billion in revenues would be allocated was not a fiscally responsible way to utilize taxpayer money, said State Rep. Sandy Pihos (R-Glen Ellyn) who voted against the bill.

A long debate ensued between both sides of the aisle over the proposal to amend the state constitution for the purpose of doubling the state income tax for people making over $250,000 or married couples with this combined income. The plan was estimated to produce $3 billion in revenues—a number that left many lawmakers questioning that the figure was accurate and how those dollars would be spent throughout the state. After hours exhausted debating the bill, the measure failed on the House floor with a vote of 52 to 60.

“I would like to see revenues go toward education and also provide relief for residents burdened with the prospect of losing their homes as a result of the skyrocketing property taxes,” Pihos said. “This proposal did not address property tax relief, Medicaid payments, balancing the budget, or paying down our pension obligation. This legislation does nothing to address the state’s $1.7 billion backlog of unpaid bills or pay down other debt. Instead the money could be used to start new programs.”

The legislation proposed to tax small businesses at a higher rate than many corporations which could drive more jobs out of Illinois and discourage new entrepreneurs at a time when job creation should be a high priority due to the current recession, Pihos said. Like the gross receipts tax proposal introduced last year, this income tax increase would ultimately be passed along to the taxpayers who are struggling to make ends meet with higher gas prices and increased property tax rates. The public was never given the opportunity to debate the bill before we took a vote as we did with the Gross Receipts Tax.

“I believe we had a fair debate over a bill that was simply not the best solution to our economic problems and that was reflected in the vote outcome,” Pihos said. “I think we can continue to work with legislators from both parties and chambers to craft something that will better address the state’s financial needs.”