Why are our sales taxes so high in Chicago, Cook County and Illinois?
Because we choose sales taxes more than income taxes in this state.
There's no such thing as a Chicago income tax. There is in New York City. And Washington, D.C. But not Chicago.
So the money has to come from somewhere. If we don't tax income, then we either tax sales or property.
That's it. Those are the choices. Income tax. Sales tax. Property tax.
And the state income tax is...low. So the state sales tax is high.
It's 6.25%. That's pretty high.
Here is a Wikipedia state-by-state comparison of sales taxes.
The state income tax is only 3%. That's pretty low.
It's the lowest income tax rate in the country. Check out Wikipedia.
There is no state property tax.
So Illinois uses a pretty high sales tax, a very low income tax and no state property tax.
If we had a higher income tax rate -- and if we used tax brackets like the federal government and like 30-some other states -- we could lower our sales tax.
So the next time you look at your receipt and wonder why the sales tax is so high, think about our low income tax and our lack of state income tax brackets.
Sunday, December 27, 2009
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