Companies in the state of Illinois will be handing-over nearly 50% more of their profits to the Illinois Department of Revenue. Green Industry business owners such as landscape contractors and equipment dealers don’t think the measure is fair, and fear that it will encourage other business owners to leave the state, making it more difficult for their companies to continue thriving.
Corporate Tax Rate Increasing 46%. Under recently passed legislation, the income tax rate in Illinois would, at least temporarily, rise to 5% from its current rate of 3%. The rate for corporate taxes would rise to 7% from its current rate of 4.8%. In 2015 the corporate rate would drop to 5.25% before returning to 4.8% in 2025.
While Illinois is the latest state to raise its corporate tax rate, there are other states with higher rates, including Massachusetts and Pennsylvania, and neighboring Wisconsin and Indiana.
How It Strains Small Business. Green Industry business owners are concerned that the “temporary” tax hike will not prove to be temporary at all. Furthermore, there is deep concern that the tax hike will encourage businesses to leave the state. Finally, there is frustration that the state legislature doesn’t recognize the real problem: spending.
“First of all, who do they think they are kidding when they say this is temporary?” says Todd Reinhart of Reinhart Grounds Maintenance in Bloomington. “Every other state that has done this has seen a mass exodus of people and business to other states. It is a spending problem, not a revenue problem. They have no ground to stand on to raise taxes until they get spending under control. I never thought that I would be saying this, but we are actually looking outside the state for other business opportunities.
“Why should people or companies stay in a state where the politicians waste their money and then continuously demand more because of their reckless spending?” Reinhart continues. “If (Illinois) was a corporation, people would be fired for incompetence, but instead we simply give them more money to mismanage.”
“If I were in a business that was easy to move, I would leave the state,” says Tom McAfoos of F.B. McAfoos, an equipment dealership in Benton, IL. “(The tax increase) will most likely have a negative impact because I feel Illinois will lose businesses to other states. If the legislature would couple a 10% cut in state spending to every 1% in tax increase, it might not be as bad; it would appear they were trying to deal with the real issue. As it is, they are just trying to cover their fiscal irresponsibility and lack of gut to do what really must be done, cut spending.”
The tax increase measure is accompanied by spending limits. Spending can not grow more than 2% annually for the next three years, or else the tax increase would be reversed.
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