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One year later: 2017 tax hike failed

By: Matthew Besler

 

It has been one full year since the General Assembly passed a budget that ended Illinois’ two-year impasse. On July 4, 2017, politicians in Springfield congratulated themselves for passing a budget, but the celebrations were cut short when people began to realize the impact the tax hike would have on their paychecks. Individual tax rates rose from 3.75 percent to 4.95 percent, and corporate taxes increased from 5.25 percent to 7 percent.

 

A year later and the results are in: This policy was a complete failure. Not only is Illinois already back in deficit spending, our economy is worse, jobs growth is lagging behind the rest of the nation, people and businesses have continued to flee, the state’s credit rating is still the worst in the country, and our unfunded pension debt and backlog of bills haven’t budged.

 

The median family in Illinois paid more than $700 in additional taxes last year—that’s on top of property taxes, sales taxes and income taxes that were already among the highest in the nation—and they have nothing to show for it.

 

The state is not any better off then it was last year. The tax hike didn’t solve our problems because we have a spending problem, not a revenue problem. We were promised reforms, instead, the politicians in Springfield took more of our money and ignored the reforms. The latest budget passed this year is estimated to be anywhere between $635 million and $1.5 billion out of balance, and it still contains no real spending fixes.

 

Some public figures are currently backing yet another tax increase in the form of a progressive income tax. This would be a huge mistake that would harm families and further damage the state’s economy.

 

The good news is lawmakers are being held accountable for their poor decisions. Ten out of the 15 House Republicans who supported the tax hike have either retired or were defeated in the March primary. There are also ten Democrats who voted for the tax increase who are not running for re-election this year, and a number of others who supported it are facing competitive challenges in the upcoming general election in November.

 

Raising taxes on families and businesses has serious negative consequences for economic growth and makes Illinois uncompetitive with our neighboring states. Lawmakers need to stop raising our taxes and start addressing the root problem: overspending. Illinoisans should demand the General Assembly pass a constitutional amendment to tie state spending to economic growth. This would ensure that politicians in Springfield cannot spend more than taxpayers can afford. If they are unwilling to do this, we should elect new legislators who will go against the status quo and refuse to support any tax increase without the spending reforms to back it up.

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