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Chicago Succeeds in Cutting Sales Tax

1 min readBy: Joseph Bishop-Henchman

Cook County officials have succeeded in rolling back half of the 1% 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. increase it approved in 2008:

Today, a majority of Cook County Commissioners overrode Board President Todd Stroger’s veto of rollback legislation.

Despite heavy behind-the-scenes lobbying by unions and a coalition of ministers standing with Stroger to keep the 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. in place, commissioners voted 12-5 to roll back the county’s portion of the sales tax from 1.75 to 1.25, or a half penny on the dollar.

Board President Todd Stroger, who championed the original tax increase and vetoed several attempts to roll it back, pulled a Washington Monument ploy, brazenly claiming that the only thing that could be cut if the tax was reduced would be hospitals for the poor. (A hospital named for his family was specifically included.)

I don’t live in Chicago but I’d suspect cutting the county payroll would be at least as achievable as closing down hospitals for poor people. I predict that despite his threat, Stroger will succeed in finding money to keep the Stroger Hospital open. In any event, Chicago will in the New Year have a slightly less terrible sales tax, at 9.75%, tied with Los Angeles for the highest big city sales tax.

Check out our sales tax map here.

UPDATE: Not that the sales tax reduction will help your Christmas shopping. It doesn’t take effect until July 1, 2010; until then Chicagoans get to keep paying the 10.25% rate.