Dear Illinois General Assembly Member:
On behalf of National Taxpayers Union’s (NTU) members in Illinois, I urge you to oppose yet another round of tax increases on families, individuals and businesses in the Prairie State. As you know, longstanding fiscal mismanagement in Springfield has resulted in a budget deficit of approximately $6.2 billion this year. This dire condition has led some politicians to call for an assortment of revenue-raising schemes. However, doing so would imperil the state’s economic recovery by placing a heavier tax burden on families while stifling job creation.
NTU is particularly concerned about the potential for regressive tax increases. One of the most egregious proposals would target satellite television customers with a new 5 percent tax, a policy that would boost prices and limit entertainment choices. In essence, this levy would punish hundreds of thousands of Illinois households simply for choosing satellite over other types of service. Some argue that this is warranted in order to “level the playing field” because the cable television industry has paid “franchise fees” in exchange for rights-of-way to lay cable. Yet, such fees are supposed to reflect a cost of doing business – rent for use of public property – and one that is mirrored by satellite providers’ need to competitively bid for the use of federally owned spectrum over which they transmit their signals.
Like the potential satellite tax, legislation to impose a one-cent-per-ounce tax on “sugary” drinks would disproportionately hurt lower-income Illinoisans and should be rejected. It would be unfair to those dealing with a struggling economy to have to shoulder the burden of higher taxes on goods and services they are accustomed to purchasing.
There are, however, negative effects to both these tax ploys that spread well beyond consumers of modest means. If some satellite customers respond to the new tax by doing without any kind of fee-based TV, employees of service providers could suffer layoffs or advancement opportunities. A sugary beverage tax – amounting to a considerable 72-cent price hike on a six-pack – could hurt Illinois convenience stores, especially those near a border with another state whose tax mark-up would be less.
Others have suggested more “progressive” tax proposals, such as a 3 percent surcharge on incomes over $1 million or imposition of a multi-tier income tax rate structure. Yet, these concepts would have other detrimental impacts on the state’s economy and should be rejected. Several nearby states have recently lightened their income taxes in order to invite new businesses and economic growth. Higher taxes in Illinois would only expedite the outflow of this activity, from which all Illinoisans could benefit.
Governor Rauner has offered a budget that would patch the current shortfall through spending reductions, not tax hikes. While cutting spending is not always politically expedient, it is vital if Illinois is to regain its standing as an economic engine that drives the region and nation. Additional tax increases would only impede the progress your constituents need.
Sincerely,
Brandon Arnold
Executive Vice President, National Taxpayers Union
