Illinois Set to Hike Taxes: Is It Necessary or Bad for State's Economy?

Jan. 13, 2011— -- As states across the country face mounting budget deficits, Illinois is preparing to hike taxes to cover a $15 billion budget shortfall.

In a plan just passed by the legislature and set to be signed by Gov. Pat Quinn, Illinois will more than double its state personal income tax rate and also levy increases on corporate income taxes to preserve some state services.

The personal income tax rate will jump from 3 to 5 percent, a 66 percent increase that some argue will hurt Illinois' economy and drive business to other states.

State Sen. Dan Duffy, a Republican, called the tax increase "the nuclear bomb of job bills," and Chicago Mayor Richard Daley, a Democrat, has said the hike will result in job losses.

But others say it's more important to keep the state government on track and programs in operation.

"I pity women trying to work and afford child care because these services were about to go away," Maria Whelan with Illinois Action for Children told ABC's Chicago affiliate, WLS.

Our question to you today: Is the state tax hike necessary or will it hurt the economy?

The Associated Press contributed to this report.

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