Moderate America

[woofer]

penny_foolish, I think you may be making more of this than is warranted. Think about it.......

By increasing the standard tax exemption from $2,000 to $6,000, he's effectively giving many struggling families a tax break.

Let's take a family of 4 who paid taxes before this proposed tax takes effect (if it does):

If the total income after deductions and 4 exemptions at $2,000 apiece was $50,000, the taxes paid at the present rate of 3% would be $1,500.

If the proposed tax exemptions were $4,000 more per person (going from $2,000 to $6,000), the family would be able to knock off an additional $16,000 from personal income. The family's income would then be $34,000. The new tax rate of 4.5% would give them a tax of $1,530, only $30 more.

How about a family of 5 whose income after taxes and current exemptions is $50,000?

Removing another $4,000 from the income from the additional family member would give a total income of $30,000 ($34,000 - $4,000). The 4.5% tax on that is $1,350, $150 less than what they currently would have to pay. So, for struggling families, the 1.5% increase (3% to 4.5%) isn't nearly so bad as it sounds.

Really though, the bottom line is that Illinois needs the money, and the best, and only way to get it is through higher taxes.

On another note, the reported amount of taxes paid by people living in any state and in any area of a state in the US is misleading. New York is considered a state with high taxes across the board but when I compared my Pennsylvania taxes with my sister's (New Yorker), it came out that we paid essentially the same amount in spite of her 8% sales tax (versus our 6%). Until recently our local taxes included an occupation tax which has now been made part of our local earned income tax (1.5%). In addition, we pay for water and garbage trash removal; she doesn't. We also pay for sewer pipe and sidewalk repairs if it's connected in any way to our property. A few years ago we had to pay the borough $4,000 when they were upgrading a sewer line that ran down the alley behind us, as did all the other residents in the vicinity. And then we have our real estate tax, state tax, per capita tax, and probably many taxes that I'm not aware of.

Here's more from your article.....

The first state income tax increase in 20 years would be cushioned in part by raising the standard tax exemption up to $6,000 per person from $2,000, the sources said.

In his six weeks as governor, Quinn has broadly hinted at increasing taxes while repeatedly saying he wants to bring fairness to the state tax system, including new exemptions to help low- and middle-income families.

The governor also is expected to propose eliminating a variety of business tax breaks, possibly some of the same ones that ousted Gov. Rod Blagojevich labeled "loopholes" but failed to close.

Bob Reed, Quinn's spokesman, declined to comment. The Democratic governor is scheduled to tell lawmakers Wednesday how he wants to fix a state budget that could be more than $9 billion in debt by July 2010 amid a sinking economy and declining revenues.

Quinn is still finishing his budget plan and sources said the size of any income tax increase or tax relief could still change. Legislators estimate a 1 percentage point increase in the personal income tax rate could bring in nearly $4 billion, but that would depend on what happens to the exemptions or other potential tax breaks.