Ill. House OKs tax relief for businesses, families

December 12, 2011 9:31:50 PM PST
The Illinois House approved a big tax-break for businesses like Sears and the Chicago Mercantile Exchange. Those two companies have threatened to leave the state unless they get some tax relief.

When the tax cuts came up in the House two weeks ago as an all-inclusive package it failed miserably. Monday, the same tax cuts were presented in a separate fashion, two bills, one for individuals and another for corporations. Each was approved by a comfortable margin.

The first bill passed increased the earned income tax credit from 5 to 10 percent, effectively, relief for low-income wage earners who supporters argued need a tax cut the most.

"As a percentage of their income, they are paying 3, 4 and 5 times as much as their more affluent neighbors," said State Rep. Barbara Flynn Currie, (D) Chicago.

"For the working families it's gonna increase their income. That's less dollars that they have to pay out in taxes, more dollars that they'll be able to have in their pockets to feed their families," said State Rep. Mary Flowers, (D) Chicago.

Most Republicans who opposed the state income tax increase 11 months ago opposed the cut for low-income workers. They say the bill's price tag-- over $100 million-- is too steep.

"The issue over tax cuts is not appropriate right now when we don't have the money," said State Rep. Jim Durkin, (R) Western Springs.

Once the low-income tax credits were passed, Democrats joined Republicans in supporting tax breaks for CME Group, the Chicago Board Options Exchange and Sears Holding Company. The businesses had threatened to leave Illinois--with their jobs--if the legislature did not reduce their tax burdens before the end of the year.

"The timing of this vitally crucial at this point," said State Rep. John Bradley, (D) Marion.

The corporate tax breaks passed by an overwhelming 81-28 vote.

Republicans said Democrat-supported income tax increases earlier this year were to blame for the corporate threats to relocate.

"It's clear that the tax increase has been a complete failure," said State Rep. Tom Cross, (R) minority leader. "You've got businesses wanting to flee the State of Illinois and they're frustrated with the tax policy of the state."

The Illinois Senate will consider both tax cut bills on Tuesday. The senate approved the all-inclusive package two weeks ago and is expected to act quickly to approve the new bills Tuesday.


The bills are SB397 and SB400.


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