Here Come the Tax Hikes

Illinois has been hit hard by the economic troubles, and their response - raising taxes. Democrat Governor Pat Quinn acknowledged that he intends to raise Illinois income taxes by 50% on taxpayers making more than $56,000. That puts the middle class squarely in the cross-hairs.

As CBS 2's Joanie Lum reports, Quinn said Friday that he plans to hike taxes from 3 percent to 4.5 percent for families that make more than $56,000 a year.

Quinn has been hinting about the problems in the state budget this year for some time. He gives his first address on the subject next Wednesday.

Illinoisans have had a lower income tax rate than other states for some time. This would be the first increase in 20 years.

In addition, some business tax breaks would be eliminated, and Quinn promises to tighten state government spending.

Quinn will balance the increase by raising the standard tax exemption up to $6,000 per person from $2,000, to help low- and middle-income families.

The income tax increase could bring in nearly $4 billion. The budget deficit is expected to be more than $9 billion by the summer of 2010.

This is yet another move to raise broad-based taxes in the teeth of a recession. Any tax cuts at the federal level will be swallowed whole by the state tax hikes.

Illinois collected more than $11 billion in personal income taxes in FY 2008 ($29 billion overall in FY 2008). Apparently that is insufficient for the spending intended.

This is yet another version of the long running shell game, and Illinois residents will be paying the price for out of control spending at a time when revenues cannot hope to match the intent of the politicians to spend.