Taxing conversation
Chicago’s soda levy loses its fizzle
Is there a limit to how much the public can take when it comes to taxes? Perhaps Chicago’s ill-fated experiment with the so-called “soda tax” can provide some insight. In August, Chicago imposed a one-cent per ounce soda tax under the guise of protecting children from the evil capitalists who sell liquids that people like to buy. In reality, the levy was a money grab intended to help cover the massive debt and pension obligations that now threaten to overwhelm Cook County.
The new tax came as the region grapples with myriad issues. As Illinois Policy notes, Chicago has seen increased violence and slow job growth, and its insular political class is legendary for corruption. Its school system is a mess. Its murder rate is a national travesty. The state of Illinois is losing population. As the dysfunction grows, so do the taxes.
City residents pay the highest taxes and fees in the state. State income taxes have gone higher and higher. As reason. com points out, the city’s sales tax — hiked in 2016 — is the highest in the nation. Cook County residents have also seen a 10 percent raise in their property taxes, and they must pay a host of new taxes on items such as e-cigarette liquids, plastic bags, garbage collection, Netflix viewing, online tickets sales and hotel rooms.
In return, residents have seen little in the way of increased or improved services. Instead, the money goes to feed the Democratic machine politicians whose fealty to public-sector unions has turned the city into an economic basket case.
And for some, the soda tax was apparently the last straw. Some business owners told the Daily Northwestern that the domino effect of having to pay the new assessment on top of a recent minimum wage increase has forced them to lay off employees. Cook County Commissioner John P. Daley told the Chicago Sun-times that his constituents are fed up with “being taxed out of the state, out of the county. The public is saying, ‘There are too many taxes, and I’m tired of it,’ ” he said.
On Wednesday, the Cook County Board of Commissioners voted 15-2 to repeal the pop tax, effective Dec. 1. Members of the panel — which voted 9-8 last year to impose the tax — cited conversations with irate constituents.
Predictably, county officials now say they’ll have to find another revenue source to make up for the $200 million the beverage levy was expected to generate. Heaven forbid that they should exercise a modicum of fiscal restraint. They’re even considering … you guessed it, a tax hike on some other random target.
But, “Consideration of any tax increase at this point could be politically difficult,” the Chicago Tribune reported this week, “given the immense backlash against the pop tax that placed county finances in the public spotlight.”
Imagine that.
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