(The Center Square) – Illinoisans live in the least tax-friendly state, something that compounds the record-high inflation, but Illinois Republicans announced a plan Tuesday for immediate relief.
The latest Kiplinger report on state tax-friendliness ranks Illinois at the very bottom. The business forecast publication evaluates income tax, property tax and sales taxes by state and Illinois came in last place.
“Sorry, Illinois, but you’re the least tax-friendly state in the country for middle-class families,” the report said.
While the report said Illinoisans have among the highest income tax and sales tax, it is property taxes that drive the ranking.
“The tax situation really goes downhill fast for Illinois residents when you look at the property taxes they have to pay,” the report said. “Property taxes in Illinois are the second-highest in the nation.”
Add record inflation to the mix, and state Rep. Avery Bourne, R-Morrisonville, said Illinoisans are feeling the brunt.
“We may not be able to address at the state level the root causes of inflation, we can and we think it is our responsibility to provide relief,” Bourne said. “And that’s why today we’re proposing inflation tax relief for Illinois families.”
State Rep. Tom Demmer, R-Dixon, wants to give up to $400 of tax credits to taxpayers under certain income thresholds.
Single tax filers up to $75,000 would get $200 back, joint filers up to $150,000 would get $400 and head of household filers up to $112,500 in income to get $200.
“Four hundred dollars won’t make all the problems go away, but it could have a positive impact,” Demmer said. “It could be an extra week or two of groceries, it could be an extra few utility bills, it could be the difference between being able to buy new shoes or winter coats for your kids.”
To pay for the $1.4 billion plan, Demmer suggested reprioritizing state spending to be offset by some of the $8 billion in federal COVID-19 relief funds.
“We can dedicate funds to pay down our unemployment insurance trust fund debt and deliver relief to taxpayers,” Demmer said.
Illinois Unemployment Insurance trust fund debt of nearly $5 billion is accumulating tens of millions of dollars of interest.
Bourne said once fully hashed out, the idea should get bipartisan support when lawmakers return in January to make the credit available in the current tax year.
“This is just one proposal, but we should be looking at a comprehensive legislative package that should be bipartisan to relieve this tax burden that Illinois families are feeling,” Bourne said.
Illinois House Speaker Emanuel “Chris” Welch’s office didn’t immediately respond when asked about his plan to address high taxes and record inflation.