BREAKING NEWS: Illinois Progressive Income Tax Hike Could Bankrupt Businesses
Illinois Progressive Income Tax Hike proposed by Governor JB Pritzker may end up backfiring.
- The U.S. economy was booming prior to the COVID-19 pandemic
- Most states were thriving and raking in billions of dollars in revenues
- However, Illinois was financially struggling and mounting in pension and other debts due to mismanagement and financial irresponsibility
- JB Pritzker, the new rookie freshman governor elected in 2018, was a brand newcomer to politics
- Many Illinoisans had very high hopes for Pritzker due to him being a billionaire and an heir to the Hyatt Hotel Family
However, all Pritzker has come up with to solving the state’s financial crisis is raising taxes and creating new taxes.
The Dangers Of Increasing Taxes
Raising taxes is a very dangerous thing to do for government.
- Raising taxes may work balancing budget deficits but it needs to be done with reducing spending
- However, Pritzker has no intention in drastically cutting spending
- For example, Pritzker has doubled the state’s gas taxes, increased vehicle sticker fees among increasing dozens of other taxes
- At the same time, Pritzker proposed wage increases for state lawmakers
- Pritzker also approved salary increases to high-level state employees
- No matter how much taxes Pritzker raises, it does not make a dent in the budget deficit due to the broken pension system
- In the meantime, countless Illinois businesses and individual taxpayers are fleeing to other lower-taxed taxes
- Now, JB Pritzker is lobbying in changing the state’s flat tax to a progressive income tax system
- This will backfire on the governor and may be the biggest mistake for Illinois
- Most experts believe an Illinois Progressive Income Tax Hike could be the straw that broke the camel’s back in bankruptcy the state
- Hundreds of Chicago businesses are moving to neighboring Indiana daily due to lower taxes
In this breaking news article, we will discuss and cover Illinois Progressive Income Tax Hike Could Bankrupt Businesses.
Illinois Progressive Income Tax Hike Could Backfire On Pritzker
With JB Pritzker’s Illinois Progressive Income Tax Hike, small business owners could face an income tax hike five times larger than corporations in the state.
- Small business owners are in a major financial crisis due to not being at maximum capacity since March due to the pandemic
- Pritzker extended the stay at home order multiple times while other states have reopened
- As time passes and these small businesses do not reopen, the chances of survival greatly reduces
- Many experts and economists told Pritzker that he should delay his Fair Tax proposal until businesses and wealthy wage earners recover from the economic damage due to the pandemic
- On the contrary said Pritzker
- The rookie freshman governor said the progressive tax is needed now more than ever
- Pritzker wants to change the current flat tax to a progressive income tax hike
- This change is expected to take $3.7 billion a year from the Illinois economy
Last month on April 15th in a press conference, JB Pritzker was asked the following question by NBC-5 Reporter Mary Ann Ahern:
Is it time to reconsider his progressive income tax hike. Instead of considering the possibility of removing the amendment from the November ballot, the governor more Illinois “need[s] it now more than ever.” But the income tax hike would hit the state’s largest job creators – small businesses – the hardest.
Critics of the progressive tax said by changing the flat tax to a progressive tax system, you will see countless Illinoisans and businesses flee the state. Changing the tax system to a progressive tax is playing with fire and can be the demise of Illinois.
Pritzker Is Lobbying Hard To Get Middle Class Voters To Support His Fair Tax Plan
Pritzker’s progressive tax plan needs voter support in November 3rd, 2020.
- Pritzker’s pitch is lower and middle class wage earners will see their state income tax rate drop while higher level wage earners will pay slightly more
- This is not true and misleading
- Dentists, Doctors, small business owners, professionals, and even civil service workers will all get penalized and pay much more with Pritzker’s progressive income tax
Martyna Szettel of Gustan Cho Associates said the following:
You could never run a business as the state runs using our money. They think it is an unending wallet upon which they can draw money from. You cannot continue to outspend your revenue. Small businesses are responsible for 60% of the net job creation in Illinois and are the businesses most at risk from the economic fallout of COVID-19. Unfortunately, the progressive income tax hike would be the largest for these businesses. Small businesses could face an income tax hike nearly five times larger than that for large businesses.
Look at the chart below:
What Experts And Economists Say
Piotr Bieda of GCA Mortgage Group said the following:
While the total corporate income tax rate – including the Personal Property Replacement Tax– will be hiked by 10% (from 9.5% to 10.49% when including the replacement tax), the tax hike for pass-through could be up to 47% (6.45% to 9.49% when including the replacement tax). New research shows fewer than half of all U.S. small businesses expect to re-open this year if the crisis lasts more than four months. For the small businesses that do manage to survive, the last thing their owners and employees need is a tax hike to crush them while they’re attempting to get back on their feet. The things [the state] has done recently tax-wise, lord have mercy. What’s left to tax?” You put this progressive income tax on the ballot – you don’t see how that’s going to make things better. The old saying, you can’t tax your way out of poverty … or into prosperity. It’s a cliché but it’s true. Research has shown that an increase in the top marginal tax rate is associated with a decrease in hiring activity of entrepreneurs and lower wages for their employees. Without continued relief provisions from the state government, businesses will struggle to survive, and job creation in Illinois will remain subdued as other states do their best to recover. All of this is not to say that larger businesses are getting off unharmed in this proposal, either. Beyond the hike on pass-through business income, Pritzker’s progressive income package would also hike Illinois’ total corporate income tax rate by 10% to at least 10.49%, and the state constitution would allow for a corporate tax rate as high as 15.28% under the proposed rates. For context, the nation’s highest marginal corporate income tax rate is 12% in Iowa, according to the Tax Foundation. And that’s scheduled to drop to 9.8% in 2021. The second-highest is New Jersey at 10.5%, putting Illinois in a virtual tie for the highest tax on business income should Pritzker’s new rates take effect.
Look at the image below:
Illinois is in dire financial crisis and near collapse. Recently, Pritzker and Democrat state lawmakers requested a nearly $50 billion federal bailout. Senate Majority Leader Mitch O’Connell and President Trump both laughed at Pritzker and told him why the federal government should bail out financially mismanaged and irresponsible states like Illinois. Illinois has a long history of financial mismanagement and irresponsibility. Illinois needs a competent leader who knows and understands finances and how to run a business. It is not how much you make or take in. It is how much you spend. Pritzker seems clueless and lost when it comes to business 101. He wants to bring more revenues by increasing existing taxes and creating new taxes while not cutting spending. Major changes need to be made in Illinois before the state collapses. Pritzker is doing absolutely nothing to attract new businesses and residents to Illinois. He sure is doing a great job in having businesses and individual taxpayers flee the state in droves.