Updated: January 30, 2014 12:00PM
SPRINGFIELD-A day after Republicans slammed Gov. Pat Quinn for Illinois’ jobs climate, House Speaker Michael Madigan introduced legislation Thursday that would cut corporate income tax rates in half to encourage businesses to “grow their work forces with good paying jobs.”
Under House Bill 4479, which would take retroactively take effect Jan. 1, the corporate income tax would drop from 7 percent to 3.5 percent, resulting in savings to businesses of between $500 million and $700 million between now and June and $1.5 billion by the summer of 2015.
“For many years, we have listened to employers about the best manner to improve the business climate. We have tackled worker compensation reform, reduced the estate tax and created an independent tax tribunal. Cutting the corporate income tax rate is another step I am asking the legislature to consider,” Madigan said in a prepared statement.
“I am hopeful this legislation will encourage CEOs to grow their work forces with good paying jobs,” he said.
The Chicago Democrat’s proposal comes one day after the lineup of Republican candidates for governor slammed Quinn, after he delivered his State of the State speech, for presiding over stagnant job growth in the state and the third worst unemployment rate in the country.
Madigan’s plan would leave the state 2.5 percent personal property replacement tax intact, leaving the effective state tax rate on businesses at 6 percent.
The speaker said he intends to have his proposal heard by two House panels — the Revenue & Finance and State Government Administration committees.
Madigan, chairman of the state Democratic Party, invoked a Republican governor in North Carolina, Pat McCrory, as a champion of lowering the corporate income tax rate. Madigan’s statement said McCrory characterized that state’s corporate income tax as “economically destructive.”
McCrory indicated that cutting his state’s corporate income tax rate from 6.9 percent to 6 percent this year and to 5 percent in 2015 was “critical to putting residents back to work,” Madigan quoted the North Carolina as saying.
Madigan said the move would even Illinois rates or make them lower than surrounding states. Madigan cited a comparative analysis by the Federation of Tax Administrators that showed total business taxes in Kentucky stand at 6%; Indiana 7.5%; Iowa, 12.0%; Missouri, 6.25% and Wisconsin 7.90%.