House GOP Wants Inflation Tax Credit
Reps. Tom Demmer (R-Dixon) and Avery Bourne (R-Morrisonville) appear in a House Republican video earlier this year. Tuesday, the pair proposed a tax credit up to $800 to offset inflation increases in the state.
Rising costs of groceries, diapers, gasoline and clothing have strained family budgets across the state, and two Republican representatives say Illinoisans should get a break on their income taxes for it.
“This is a real world impact for a lot of the families we represent,” said Rep. Avery Bourne (R-Morrisonville). “We can, and we think it is our responsibility, to provide relief.”
Bourne and Rep. Tom Demmer (R-Dixon) proposed a tax credit of $200 for single filers who make $75,000 or less. Couples who make $150,000 or less would get a credit of $400 to help offset price increases due to inflation.
The IRS has already increased the standard deduction claimed by most Americans by $800 for married couples or $400 for single people in 2022, which would be claimed in 2023.
Inflation nationwide is around 6% over the past year, compared to a little over 1% in calendar year 2020. Broadly, inflation is the rate at which the value of the dollar is falling, which drives up the price of goods and services.
“Most families aren’t sitting around tracking the Consumer Price Index,” said Bourne, “But they don’t need to to feel the impact inflation is having on their monthly budgets or when they go to the grocery store.”
Republicans are not asking the legislature to cut the income tax rate or to freeze property taxes statewide.
Demmer says he wants the credit to appear on 2021 taxes, which would be on taxes due next April. To accomplish that, it would have to pass quickly in January to implement it in time. The legislature isn’t scheduled to return until early January and House Democrats haven’t seemed super excited about moving key Republican policy initiatives, so we’ll see if they get a hearing on the bill.