In what could be a short term stay-of-execution, the Cook County Commissioners were deadlocked this week, eight votes for and eight against a two percentage point increase in the county-wide sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. rate.
Read previous blogs on the Cook County sales taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. rate here and here.
The county rate is currently 0.75 percent and the increase would bring the rate to 2.75 percent, more than triple the current rate.
Chicagoans currently pay 9.0 percent on all their purchases when the state rate of 6.25 percent, the city rate of 2.0 percent and the 0.75 percent county rate are combined. 9.0 percent is already one of the highest rates in the country, and the proposed 2.0 percent increase would push the total rate in Chicago to 11.0 percent.
The reprieve from the tax increase is only temporary because the commissioners will take up the tax hike again October 16 and the president of the commission, Todd Stroger, may vote to break the tie. From the Chicago Tribune:
Stroger went so far as to say he’d cast a rare tie-breaking vote for the tax hike if need be to fill a projected $307 million budget shortfall for 2008.
Stroger supported the tax hike, saying it would give the county enough revenue-$750 million annually-to avoid coming back to the taxpayers every year seeking more money.
The $750 million increase is a massive tax hike that will largely be paid by lower-income individuals and will hurt businesses in the county that will see their customers travel to adjacent counties or use the internet to make their purchases.
Cook County would be well advised to cut spending to close its budget gap, rather than go through with this enormous tax hike that will damage its economy by driving consumers, residents and businesses away.
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