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Sales tax for RTA is not the solution

Monday, April 11, 2005
Daily Southtown

THE ISSUE: Daley eyes sales-tax hike to help CTA, Pace and Metra.
WE SAY: Region can't afford another sales-tax increase.

Mayor Richard Daley said last week that the Legislature should consider raising the sales tax that helps pay for mass transit in the Chicago area. Daley questioned the viability of Gov. Rod Blagojevich's solution for the CTA's funding crisis a tax on some computer software purchases by large companies.

Daley's skepticism about the software tax ought to give pause to the governor, but we don't share the mayor's enthusiasm for yet another sales-tax hike. Daley raised the city's sales tax by 0.25 percent in order to balance this year's budget. The increase brought the sales tax to 9 percent in Chicago, which now has the second highest sales tax in the country. The sales tax is regressive, hitting low-income people the hardest, and middle-class people harder than the wealthy.

County Board President John Stroger learned earlier this year that the public would not accept another sales-tax hike. Outrage greeted Stroger's proposal for a sales-tax increase on restaurant bills, and a majority on the county board eventually forced Stroger to withdraw the proposal.

Of course, the governor isn't likely to embrace a sales-tax increase; his administration has steadfastly opposed sales- and income-tax increases, whether they are needed or not. We can't imagine Blagojevich would reverse himself so soon before his re-election bid.

Daley suggested increasing the sales tax after Gov. Rod Blagojevich unveiled a proposal for expanded gambling to raise more money for schools. The governor said he wanted to let existing casinos operate more slot machines and table games rather than issuing one or more additional gambling licenses, like the one Daley was seeking for Chicago.

After hearing about the governor's proposal, Daley backed away from his request for a Chicago casino and said his priorities now are education and transit funding.

Those are the right priorities, but a sales-tax increase is the wrong solution. Our elected officials can't continue to rely on taxes that put the burden on the people who are least able to pay. The mayor, the governor and their colleagues in the Legislature need to find an alternate revenue source.

What we're seeing here are the results of the governor's politically popular pledge to avoid an income-tax increase despite a continuing budget crisis and increased needs for revenue in crucial areas such as public education and transportation. The income tax would be the fairest source for necessary revenue because it is based on ability to pay, unlike the sales tax and the even more unfair property tax, whose relationship to ability to pay is in some cases nonexistent.

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