How tax reform could impact Illinoisans - WSIL-TV 3 Southern Illinois

How tax reform could impact Illinoisans

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WSIL -- With tax reform now law, Illinoisans can expect some changes when they file their taxes next year. 

When President Donald Trump signed tax reform into law Friday morning, Republicans celebrated, saying it would lead to economic growth and more money for middle class families, while Democrats say it favored the wealthy and would hurt everyday Americans by adding more than a trillion dollars to the deficit over the next decade.

"I consider this a bill for the middle class and a bill for jobs," Trump said after signing it.

Southern Illinois Congressman Mike Bost voted for tax reform, which passed along party lines, and says it's a good law for Illinoisans.

"We came out with a plan that is tremendously beneficial for the majority of Americans and will also stimulate growth," Bost said.

An analysis by the non-partisan Institute on Taxation and Economic Policy, a Washington, D.C. based think tank, takes a look at the immediate and long term effects of tax reform on Illinois taxpayers.

It shows that 85 percent of Illinoisans will see a tax cut next year, while just seven percent would see a tax hike, with most of those in the top 30 percent of earners. 

On average, the bottom 60 percent of Illinoisans would receive a tax cut of about 540 dollars next year.

But the analysis shows, when the tax cuts are set to expire in 2025, it's the poorest Illinoisans that will be hit the hardest.

In a decade, nearly 30 percent of Illinoisans will see a tax hike, with with the bottom 40 percent covering more than 60 percent of those hikes, while the top fifth of earners would cover just five percent.

In addition, the bottom 60 percent, on average, would see slight tax increases, while the top 40 percent would still see tax cuts.

In an interview last week, Senator Dick Durbin, who voted against the law, said its initial lower and middle class tax cuts were good, but because those expire while corporate tax cuts do not, it will hurt poorer Americans while benefiting the rich.

"The helping hand it gives to middle income families is a start but the fact that it's only temporary while the tax breaks for big corporations and wealthy people are permanent is really upside down," Durbin said.

Now Republicans like Bost say the lower and middle class tax cuts won't actually expire, because they'll be renewed in the future.

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