January 12, 2011

IL tax hike an inevitable outcome

Eileen Norcross

Senior Research Fellow

With Illinois passing a 66% tax increase on income taxes, it's important to look at the factors leading to the state’s budget deficit.

This solution is not business friendly, and it will drive people out of the state, but this is the inevitable outcome to this type of budget situation.

Part of the reason Illinois has reached such a high level of debt is that it has strict protections built into its constitution that prevent them from modifying the formula of public pensions. 

State legislators are going to increase taxes and damage economic growth to comply with rules they put in place that they can’t change, such as not touching pensions.