Illinois House Speaker Michael Madigan is proposing a measure that would cut the state’s corporate income tax rate in half. The Chicago Democrat’s bill, introduced today, calls for lowering the corporate tax on profits from 7 percent to 3.5 percent.
Madigan said in a statement, “I am hopeful this legislation will encourage CEOs to grow their work forces with good paying jobs.”
Madigan’s proposal would work retroactively, with an effective date of Jan. 1 this year. He estimates it would save companies a combined total of up to $700 million dollars this year.
“This is a very welcome proposal,” said Todd Maisch of the Illinois Chamber of Commerce. “While the substance is important in rolling back a very, very high corporate income tax rate, what’s almost as important, if not more so, is the change in the tone in the debate about taxes at the Statehouse.”
Maisch said the tax mostly affects large businesses in Illinois.
The legislation, if enacted, would more than reverse a corporate tax increase implemented nearly four years ago. State lawmakers then passed a measure raising the corporate income tax rate from 4.8 percent to its current 7 percent, making it one of the highest rates in the country.
Madigan is also chairman of the state Democratic Party. His move to cut the tax comes as most of the four candidates running in the March 18 Republican primary for governor are calling for reductions in both the corporate and personal income tax rates.
Democratic Gov. Pat Quinn has not said where he stands on the issue.
Tony Arnold covers Illinois politics. Follow him @tonyjarnold.