In a very close 60 to 57 vote, the state legislature in Illinois voted to pass a major tax hike that is sure to cause concern among the citizens and owners of small businesses that reside in the sate. The legislation would raise about $6.8 billion a year for the state's beleaguered budget by raising the individual income tax rate temporarily to 5 percent from 3 percent and the corporate tax rate to 7 percent from 4.8 percent. Revenue from the tax hikes would enable Illinois to sell about $12.2 billion of bonds to pay off a huge bill backlog and make a $3.7 billion pension fund payment for fiscal 2011.
That will not, however, sit very well with small businesses already operating close to the red. Many will likely be forced to pass these hikes on to consumers who are also paying more in state taxes. The end result may not be pretty. State Senator Kirk Dillard was heard to remark that “no state ever taxed its way into prosperity”. I guess we’re about to find out.
Now the concern, among some in this state and in other strapped locales like California, is that anyone who can pack up and leave may do so. That fear may well spur lawmakers to pass laws requiring a business to ‘stay put and suffer with the rest’. The states could call such a measure a ‘Personal Business Mandate II’ or PBM2 and model it after the original ‘Personal Healthcare Mandate’ that requires individuals to buy health insurance as a requirement of citizenship. (A law, which is also being challenged by a number of states, is touted by many as unconstitutional).
My answer to all this constitution stuff is “who cares”? That old rage needs to be replaced anyway by something more up-to-date and the current administration is more than capable to do the job. In the words of one man on the Hill, "People are sheep and sheep were made to shear."