Wednesday, February 5 2014, 08:59 PM CST
Lawmakers Studying Connection Between Tax Rates and Unemployment
Illinois lawmakers continue to work on trying to figure out how to grow
the Illinois economy and create more jobs. Today, they are looking at
potential connections between tax rates an unemployment.
the information wasn't good news for the state--including the fact that
Illinois maintained the third-highest unemployment rate in 2013, behind
only Nevada and Rhode Island.
That was part of the findings from
the Commission on Government Forecasting and Accountability. Some of
their research included looking at what happened when states changed
their personal income tax rates since 2008. Individuals and many small
businesses pay at the personal rate. In states that raised rates,
including Illinois, unemployment was an average of 7.3 percent. Of those
who lowered the rates, unemployment averaged only 5.9 percent.
where our real job growth is gonna be, is the small businesses" Rep.
Wayne Rosenthal (R - Morrisonville) said. "I think that if those tax
rates go down and the business climate is improved, and they put more
people back to work, like I say, we'll generate revenue just because we
have more people working."
COGFA also looked at states who
changed their corporate income tax rates since 2008, and found similar
results. The states that raised rates averaged 8.6 percent unemployment.
Those that lowered corporate taxes were at only 6.7 percent.
wasn't all bad news, though. The Department of Commerce and Economic
Opportunity presented its data, which showed Illinois as the top job
creator in the Midwest.
The committees also heard testimony from
the comptroller's office, which reported on state fees. There was some
interesting info there. The largest state fee is a $2 million annual
charge for operating a nuclear power reactor. The fee that generates the
largest revenue is tuition at the University of Illinois. That brought
in $999 million last year.