July 30, 2010

Illinois Democrats plan to raise the state income tax by 66 percent in January, Governor Pat Quinn's budget director has told Bloomberg Businessweek.

“We’re going to pass a tax increase in January. We expect it is going to be substantial,” Quinn budget director David Vaught is quoted as telling the national business publication.

Vaught said an increase from the current 3 percent to 5 percent is likely. It would cost taxpayers $6 billion and would be the largest tax hike in Illinois history.

In 2009, Democrats in the Illinois Senate approved a similarly-sized tax increase, but the House has not acted on that increase. It's unclear from Vaught's remarks if he was referring to that increase – which could yet be passed by the House – or if he was referring to a new proposal.

Senate Republicans have consistently said raising taxes would hurt consumers and could have a deadly effect on job-creation at a time when Illinois is already suffering from some of the highest unemployment rates in the nation. Republicans also point out that any tax increase, without core reforms to state government, will only offer temporary relief and lead to even more tax hikes in the future.