SPRINGFIELD — Chances are workers have already seen the impact of Illinois’ 32 percent income tax increase. 
Workers who’ve been paid for the first two weeks of July didn’t take home as much as they hoped. 
The state’s income tax increase retroactively took effect July 1, as did a 33 percent corporate tax increase also approved by the General Assembly.
The Illinois Department of Revenue said large employers started withholding the tax increase almost immediately. Small employers started withholding too.

Mark Grant with the Illinois Chapter of the National Federation of Independent Businesses said the tax hike is tough for many small businesses to swallow. 
“I have been talking to our members about the tax, and they’re really upset,” Grant said. “Small business owners across the state are looking at paying a lot more, as well as the the people that they employ.”
Grant said small business owners in Illinois had hoped they’d get business reforms from the Capitol this year, including workers’ compensation reform and property tax relief. Instead, Illinois lawmakers simply raised the income tax. 
“I was just talking to one of our members in the McHenry County area,” Grant said. “He was saying that the tax means he can’t bring on another employee. He can’t pay his employees quite as much as he wanted to. He can’t get another truck to expand his business.”
Grant said instead of encouraging small businesses in Illinois, lawmakers and the new tax are making it that much harder for businesses to simply survive. 
Illinois’ income tax rate jumped from 3.75 percent to 4.95 percent, and its corporate tax increased from 5.25 percent to 7 percent. That’s enough to essentially erase 28 hours of work from a worker’s paycheck over the course of a year.