Monday, November 22, 2004

Sales tax or property tax -- which is worse?

I'd say the sales tax is worse than the property tax.

And both are worse than having public employees foot some more of their health care costs.

The City of Chicago and the County of Cook are both facing deficit budgets.

Leaders are floating tax increases and avoiding layoffs.

The main source of tax revenue seems to be the sales tax -- already the highest in the nation (at least among the top three).

We have a 6.25% state sales tax (although 1% of that 6.25% gets kicked back to cities).
A 0.75% RTA (mass transit sales tax) in Cook County.
A 0.75% County of Cook sales tax.
A 1% City of Chicago sales tax.

Not to mention the 1% McPier (Navy Pier and McCormick Place convention center) sales tax on food in, basically, the 312 area code portion of Chicago.

That's a lot.

And all that money -- approaching 10% -- is not deductible from our federal returns (unless there was a recent change to the federal tax code).

The property tax is deductible.

I know that we rely too heavily on the property tax now to fund our governments in Illinois. We rely on the sales tax too heavily as well.

And we don't rely on the income tax enough. That rate is 3%.

The best answer, as well as ensuring that we fire the unneeded workers (and there are always some workers who should be fired), is to raise the state income tax and distribute that money to local governments.

And get out of these huge pension costs. New employees should be paid more in salary but be responsible for their own pension.

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