The big honking tax increase passed yesterday in Illinois doesn't reduce Iowa's tax burden, but it at least makes Iowa look a little less bad by comparision. While Iowa still has the 45 best (sixth worst) business tax climate, Illinois will tumble from 23rd best to 36th, reports the Tax Policy Blog.
Looked at properly, though, it makes Iowa's tax system even more depressing. Illinois can pass an enormous tax increase that is likely to stagger that state's economy, but Iowa's same-old tax system is still significantly worse. The new 5% Illinois tax rate and 9.5% corporate rate are below the Iowa rates, even taking into account the benefits of Iowa's deduction for federal taxes.
Legislators, there is an alternative.
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