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On September 3, 2025, Illinois lawmakers announced a series of new tax measures aimed at addressing the state's ongoing budget deficit. The proposed legislation includes a mix of increases in certain taxes and fees, as well as cuts to certain tax breaks and deductions.One of the key components of the new tax legislation is an increase in the state's income tax rate. Under the proposed changes, individuals earning over $250,000 annually will see their income tax rate rise from 5% to 6%, while those earning over $500,000 will face a new top rate of 7.5%. Lawmakers believe that these changes will generate much-needed revenue to help fund essential state services and programs.In addition to the income tax increases, the new legislation also includes hikes in the state's gasoline tax and cigarette tax. The gasoline tax will increase by 10 cents per gallon, while the cigarette tax will rise by $1 per pack. These increases are expected to generate additional revenue for the state while also discouraging certain behaviors, such as smoking.To offset some of the impact of these tax increases on lower-income individuals, the legislation also includes an expansion of the state's Earned Income Tax Credit (EITC) program. This program provides refunds to low-income working families, helping to offset their tax burden and put more money back in their pockets.Furthermore, the new tax legislation eliminates certain tax breaks and deductions that were previously available to corporations and high-income earners. This includes the elimination of certain corporate tax credits and deductions, as well as a cap on the amount of mortgage interest that can be deducted on state taxes.Overall, lawmakers are hopeful that these new tax measures will help address Illinois's budget deficit and ensure that the state can continue to provide essential services to its residents. The legislation is expected to face fierce debate and scrutiny in the coming months as it makes its way through the state legislature.