Illinois fares badly in latest Tax Climate Index | Illinois
(The central square) – Illinois scores poorly in a state fiscal climate report.
The Tax Foundation State index of the fiscal climate for companies compares state tax systems using several categories, including personal income tax, corporate income tax, sales and property taxes, and unemployment insurance taxes.
The authors note that while there are many ways to show how much taxes are collected by state governments, the index is designed to show how well states are structuring their tax systems and provides a roadmap for improvement. .
Political analyst Janelle Cammenga said Illinois was ranked 36e across the country, and was impacted by the state’s corporate income tax.
“The state has adopted new [tax break] treatment of temporary business interruption, âCammenga said. âNow, when it comes to net operating losses, they peak at $ 100,000 for the 2021 to 2024 tax years, which will really make a difference for businesses, especially in this time of economic downturn where they could. suffer more losses than in others. year.”
Cammenga said the only category that has kept Illinois from ranking lower is personal income tax.
âPersonal income tax is what is really driving Illinois up right now, as it has a fixed income tax of 4.95% while the rest of the tax code does. not as competitive, âCammenga said.
Governor JB Pritzker attempted to change the personal income tax code with his Progressive Income Tax Amendment in 2020, but voters in Illinois defeated the measure from 55% to 45%. It was a bitter defeat for Pritzker, who donated nearly $ 60 million of his personal fortune to the Vote Yes for Fairness campaign in an effort to persuade voters to vote yes.
The top three states in this year’s ranking are Wyoming, South Dakota and Alaska. The lack of a major tax is a factor common to many of the major states. Property taxes and UI taxes are collected in all states, but many states dispense with one or more of the major taxes: corporate tax, personal income tax, or sales tax.
The last three states in the tax classification are New Jersey, New York and California. The report says states near the bottom have a number of afflictions in common: complex, non-neutral taxes with relatively high rates.