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Our view: Sales tax hike in Cook County would do more harm than good

Thursday, July 09, 2015
My Suburban
by Suburban Life Media Editorial Board

When Toni Preckwinkle took over as president of the Cook County Board in 2010, she had some tough decisions to make.

She’d campaigned and won on a promise to have the Todd Stroger-era county sales tax hike repealed. When it came time to actually figure out how to cope with less income, she made some decisions you don’t often see Democrats making. She led the board to pass tough but necessary cuts to services, laid off county staff and in the process antagonized the public employee unions that would otherwise have been her staunch allies.

With that history behind her, it’s very strange to see Preckwinkle proposing a sales tax hike now. We recognize that the county is in a bind, that the state’s pension crisis has crippled the county’s finances and that the board members are trying to pick from a menu of unappealing options. But increasing the county sales tax would merely amount to piling a local bad decision on top of all the state’s poor moves.

You may have heard this before, but it bears repeating: the sales tax is a regressive tax, meaning it disproportionally affects the poor. This stands in contrast to the federal income tax, which is progressive (meaning the wealthier you are, the higher rate you pay), or a flat tax, where everyone pays a set percentage of their income.

The sales tax is regressive because while someone making $20,000 a year and someone making $200,000 pay the same amount in sales tax when they both buy the same loaf of bread, that amount is a higher percentage of the poorer resident’s income. Any increase in the existing sales tax will have a much bigger impact on the poor – the very people Preckwinkle hopes to protect by raising the tax – than it will on anyone else.

The second group that stands to suffer if a sales tax goes through would be the local businesses of Cook County, especially those that border areas with lower sales tax rates. DuPage County, for instance, is not much of a hike from Berwyn, Riverside or La Grange, and with a 7.25 percent sales tax rate, it would certainly be worth spending a little more in gas if you were making a sizable purchase. Go a little further, and you can find a 7 percent sales tax rate in Lake or Will counties or Northwest Indiana.

Cook County is currently at 8 percent, probably high enough for some people to already consider the trip. Add another percent, and local car dealerships, corner stores and the like will definitely feel the pinch as shoppers head out of town.

 Preckwinkle has stated to multiple news outlets that she’s only proposing a hike because of the state’s failure to enact public pension reform. And there’s no question that the state has made the Cook County Board, along with many other governmental bodies, twist in the wind while it takes its time addressing the topic. But we hope that her push for an income tax hike is just a negotiating tactic, because actually enacting it would do more harm than good.



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