The nagging voice of doubt is trying to talk me out of writing this column:
You want to call for more sales taxes in Illinois? The
very week Cook County residents are reeling and seething over the
latest hike?
Yes, more sales taxes. Not higher taxes, but more taxes on more consumer transactions.
Such as?
Well, shoe repair, to name just one. When a shop fixes your boots in Illinois, you pay a fee but no tax.
That's a good thing.
Sure, if you're a cobbler or if your uppers are distressed. But if you
own or shop at a store that sells new shoes and every purchase now
includes up to an additional 10.25 percent in sales taxes, it's not
such a good thing. It's unfair and illogical.
So you want to propose adding a shoe-repair tax in Illinois?
Among other taxes, yes. Tables published three years ago by the
Federation of Tax Administrators in Washington found more than 150
different services and forms of amusement that are subject to "sales"
taxes in at least one state.
These include haircuts, dry cleaning, tuxedo rental, window washing,
printing, limousine rides, circus admissions, health club memberships,
carpet cleaning, diaper services—
OK, I get the idea.
—none of which are subject to tax in Illinois. In fact, Illinois taxes
only 17 such services—photofinishing, for instance—fewer than all but
five states.
Hallelujah!
No. Phooey. Concentrating taxes on retail businesses tends to push
rates up to the sorts of percentages we're now seeing in Chicago and
Cook County.
A broader tax base would share the burden more evenly and,
theoretically, keep rates down while keeping government revenue the
same.
Iowa, for instance, taxes 94 services—seventh most in the nation. And the sales tax in Des Moines is 6 percent.
OK, but there's no way you can suggest adding more taxes without people hearing "tax increase."
That's true. And if Illinois simply added on to the kinds of
transactions subject to the current sales tax rates, people would be
right. This idea is only a good one in the context of significant other
tax relief and reforms, such as sales-tax credits for lower and
middle-income families.
I'm still hearing "tax increase."
And I'm not blaming you. The reason the system's out of whack in the
first place is that lawmakers and citizens in Illinois "have been
unable to have adult conversations about taxes," said Ralph Martire,
executive director of the Center for Tax and Budget Accountability in
Chicago.
Martire's a booster of stalled legislation in Springfield that would
broaden the reach of sales taxes as part of a restructuring of the
system. He said the current system is a holdover from the days when
sales were 32 percent of our economy. Growth in the service sector has
reduced that to 13 percent.
"If every year you're taxing a smaller and smaller portion of your economy, you have a very hard time keeping up," Martire said.
Yes, but Martire's the guy who says Illinois is a comparatively low-tax state!
And his numbers look sound to me. But even some of those who disagree,
such as Jim Tobin, head of National Taxpayers United of Illinois, say
they're not opposed in principle to adding sales taxes to a new range
of services.
So you're prepared to argue in this column that lawmakers
would balance out all the new taxes with compensatory tweaks so that,
in real life, most of us wouldn't end up paying more to The Man?
I'm not. You're the doubter, I'm the dreamer.
Join this dialogue online at chicagotribune.com/zorn
