Moving Forward

Moving Forward: To Counter the Current Recession, Illinois State Government Should Maintain or Enhance Spending—Even if it Means Progressive Tax Increases—Rather Than Cut its Budget


March 11, 2009

Illinois decision makers are confronted with two immense challenges. On the one hand, state government is facing the largest deficit in its history, with published estimates of the hole ranging from $4 billion to $9 billion. At the same time,  the U.S. and state economies are suffering through what looks like the worst recession since the Great Depression. How the state elects to resolve its record deficit will have a meaningful impact on the size and duration of the recession in the state's economy. Given this scenario, the state's best hope of growing its economy and countering the recession is to close its deficit by raising taxes progressively and maintaining or expanding spending on services.

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Topics:Tax and Budget, Illinois Budget, Revenue Policy

Tags:State Budget, Deficit, Great Recession, Taxes, Illinois Economy, Graduated Income Tax, Economic Multiplier