House Speaker Michael Madigan is proposing cutting Illinois' corporate income tax rate in half in an effort to improve the state's business climate.The powerful Chicago Democrat introduced legislation Thursday that would cut the rate from 7% to 3.5%, effective Jan. 1, 2014.
In a news release, Madigan says he hopes the cut ``will encourage CEOs to grow their work forces with good paying jobs.''
Democratic lawmakers in 2011 approved a temporary tax hike as a way to address Illinois' fiscal crisis. It raised the corporate income tax from 4.8% to 7%. The increase is scheduled to be rolled back to 5.25% on Jan. 1.
Republicans have criticized Democrats for creating an unfriendly business environment, saying increased taxes have contributed to Illinois' high unemployment rate.
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A spokeswoman says Illinois small businesses won't be affected by House Speaker Michael Madigan's proposal to cut the corporate income tax rate.
Kim Clarke Maisch is Illinois director of the National Federation of Independent Business. She says 75% of the state's business operations pay personal income taxes.
Madigan proposed cutting the corporate rate from 7% to 3.5% immediately to improve the business climate.
Maisch says the proposal is a step in the right direction but "the real job-creators are small business owners.'' Lowering the personal tax rate would help them most.
A 2011 temporary hike in both personal and corporate rates is set to expire next January.
