A few months ago I wrote this reflection on the idea that bad leadership can be seen as a punishment or consequence of sin, and how the ethical and fiscal train wreck that is Illinois state government might serve as an example of this concept.
Now we are seeing further evidence of this concept. In the waning hours of their own lame-duck session, the Illinois General Assembly early this morning passed one of the most drastic tax hikes in state history.
The measure raises the individual income tax rate from 3 to 5 percent (thereby increasing each individual’s total tax liability by 66 percent) and the corporate tax rate from 4.8 to 7 percent. Gov. Pat Quinn has promised to sign the tax hike into law as soon as possible.
The corporate income tax, combined with an existing 2.5 percent tax that replaced an old personal property tax, means corporations in Illinois will be taxed at a total basic rate (not accounting for any exemptions or deductions) of 9.5 percent, the fourth highest rate in the nation. Although the tax hikes are supposed to be in effect only for the next four years, most residents expect all or part of the increases to end up being permanent.
The reason for this action is the state’s cataclysmic $15 billion-and-mounting budget shortfall. The growing deficit threatened to lower Illinois’ bond rating to junk status, possibly within days. In response, lame duck legislators in the last 12 hours of their term voted to approve the tax hike. A loose spending cap was approved along with the tax hike, but no specific or significant budget cuts accompanied this legislation.
Needless to say, the impending tax hike has many residents angry and feeling betrayed yet again by their elected officials. Gov. Quinn, elected to a full term by a very narrow margin, had said prior to the election that he would not approve of raising the income tax for individuals beyond 4 percent. However, this measure goes a full percentage point higher. Many predict a significant loss of jobs and residents as a result.
But what does this have to do with the “wages of sin” spoken of by St. Paul?