Just a few short months ago, Illinois Democrats worked their ‘magic’ and passed several tax increases. These tax increases directly affected sports betting wagers, hotel and short-term rentals, cell phones, and tobacco products. More tax increases were put on the table and did not pass, but that does not mean those proposals are dead. Not by a long shot.
Chicagoland public transit agencies are still facing a massive fiscal cliff and operating budget shortfall of over $770 million, and Democrats have indicated it is their intention to address the issue during the upcoming Veto Session. The Regional Transportation Authority (RTA) warned back in late May that major service cuts and thousands of layoffs would be on the table unless the fiscal crisis was addressed.
The General Assembly, led by tax-and-spend Democrats, had a ‘solution’ cooked up very late during the Spring Session. A bailout reform package that included multiple tax increases actually passed the Senate but stalled out in the House. That tax increase package (HB 3438) included a $1.50 delivery tax that would be added to nearly every package shipped to Illinois homes, with a few exceptions. The tax would apply to popular delivery providers such as Amazon, Grubhub, and many small and large businesses alike. These providers are utilized by all Illinoisans, regardless of location, age, or income level. The tax would be particularly impactful to vulnerable populations, including seniors on fixed incomes.
And if a delivery tax wasn’t enough, Democrats nearly implemented a ‘service tax’ as well. Most new taxes and tax increases are unpopular, but this one really hit home during the final days of the Spring Session. And while the service tax did not pass, it’s likely to be brought up again during Veto Session. This incredibly intrusive tax would target a bevy of services in Illinois, including: streaming services (Netflix, etc.), rideshare services (Uber, etc.), gym memberships, hair salons/barbershops, car wash and repair locations, plumbing and electrical repair services, lawncare/landscaping services, and so many more.
“Let’s call this proposal what it is - a bailout for Chicago mass transit,” said Deputy House Minority Leader Ryan Spain (R-Peoria). “At a time when high prices are still hurting family budgets and stifling small businesses, the last thing Illinoisans need is a new tax on the basic services we all rely on. Even worse, if this new tax is adopted, it would be the highest service tax in the country. Families, seniors, and small businesses can’t afford another tax; It will only force more people to leave our state.”
Only four states in the U.S. levy a tax on general services, but Illinois Democrats seemingly can’t wait to be the fifth. Proposed legislation would slap a 6.25 percent (or more) fee on over 80 distinct service categories. Need some laundry dry-cleaned? Pay a tax. Searching for a new job? Pay a tax. Need to get your dog groomed? Pay a tax. Fixing up the house? Hey, how about paying an extra tax on that as well. These proposed service taxes could generate over $2.7 billion annually for Democrats to spend on bailouts, local pork projects, healthcare for illegal immigrants, and anything else they can think of, all at the expense and financial burden of Illinois families just trying to go about their everyday lives.
“We fully expect the service tax conversation to come back during veto session this fall,” said Deputy House Minority Leader Norine Hammond (R-Macomb). “This is a clear sign that Illinois families and small businesses are going to be asked to do more while the government continues to spend more. A service tax will drive up the cost of living even more for Illinois families.”
Increasing tax burdens are stifling economic growth and negatively impacting the quality of life for our residents while also forcing the closure and relocation of many businesses. This cycle must end, and policies that champion fiscal sanity and responsibility need to be implemented by lawmakers in this state.