Tax hike costs taxpayers $1,100 more in 2014

SPRINGFIELD - The typical taxpayer is paying about $1,100 more this year compared to last year due to the temporary tax rate increase, according to the Governor's Office of Management and Budget's calculations.

The temporary increase, from three percent to five percent, was approved in 2011, and is producing about $6.6 billion in additional revenue for the state this year.  Democrats promised that the tax rate would roll back to 3.75 percent in January 2015, but now Governor Pat Quinn and legislative democrats want to make the five percent rate permanent.

Democrats say if the tax rate were to roll back as planned, drastic and painful cuts could occur to education, social services, and other state programs.  Republicans oppose the tax hike, saying the government needs to cut back its spending, and that the new rate hurts the state's economy and business climate.  

According to Quinn's assistant budget director Abdon Pallasch, rolling back the rate would save taxpayers' money in state income taxes, but the result could be that they pay more in local property taxes, such as those used to pay for public schools, which would see cuts in state funding.

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