According to the Chicago Tribune, Illinois House Republicans have proposed reducing increase on corporate income tax that was initially passed in January by Democrats, which hiked the corporate tax income from 4.8 percent to 7 percent. Alternatively, Republicans are seeking a gradual rollback by dropping the rate to 6 percent in 2013 and dropping it back to 4.8 percent in 2014.
In light of this new proposal, Illinois Gov. Pat Quinn stated that cutting the tax rate would create a budget hole of $1 billion and ultimately harm the state's education system. Here are some facts on the recent struggle to keep businesses in the state:
* The Wall Street Journal reported that this week the Illinois General Assembly approved a tax break package for companies in an attempt to keep Sears Holdings Corp., CME Group Inc., and CBOE Holdings Inc. after they threatened to leave the state.
* CME had threatened to leave after the state when the corporate tax was hiked to 7 percent in January, claiming that the increase led to an additional $50 million tax bill.
* A report from the Medill School at Northwestern University indicated that in August, the increase was yielding the state's desired results, specifically a 40 percent increase in revenue to $2.3 billion from $1.7 billion between fiscal years 2010 and 2011.
* The corporate tax enacted within the first few weeks of 2011 is not intended to be permanent and will drop back to 5.25 percent in 2015 and 4.8 percent in 2025, a decline Republicans and businesses claim is too slow.
* Manufacturer Modern Drop Forge left Illinois in August, moving operations and 240 jobs from Blue Island to Merrillville, Indiana, as a result of the rise in corporate income tax, reported WBEZ.
* Indiana took advantage of Modern Drop Forge's interest in leaving Illinois by offering $2 million in performance-based tax credits and up to $200,000 in job training grants.
* Since the hike, the state of Illinois has the third-highest corporate income tax in the country, up from previously claiming the 21st highest spot, according to CNN Money.
* Businesses have spoken out against the tax hike, which is in addition to a 2.5 percent surcharge, saying that it will not allow for them to create more jobs or invest in increasing their production and improving their operations.
* By pushing for a rollback of the tax, House Republicans are looking to stop the state from giving handouts to companies threatening to leave the state and cutting jobs for residents.
Rachel Bogart provides an in-depth look at current environmental issues and local Chicago news stories. As a college student from the Chicago suburbs pursuing two science degrees, she applies her knowledge and passion to both topics to garner further public awareness.
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