Kristina Rasmussen
Executive Vice President

Not content with hiking our income taxes, some state legislators want to hike TV taxes in Illinois. Yes, TV taxes. There truly is no end to Springfield’s madness.

Specifically, subscribers to satellite TV would face a new 5 percent tax on their service, costing Illinois consumers roughly $75 million a year.

The state Senate passed the measure in May, and the bill, House Bill 5440, could be taken up by the House before the next General Assembly is sworn in on Jan. 9, 2013. You can see how individual senators voted on the TV tax (see page 12).

The folks pushing the tax hike – namely, the cable industry – claim this is an attempt to require “parity” between different providers of television services. Cable is stuck with hefty franchise fees, while satellite doesn’t have a similar burden (indeed, satellite doesn’t use local rights of way like cable does).

I offered testimony on the issue of satellite taxes versus cable franchise fees to the U.S. Congress in 2008, when I made following the point:

Imagine paying a higher tax rate if you received your salary via direct deposit instead of a check. Or paying taxes on chocolate ice cream but not vanilla. The same thing goes with TV service: Consumers shouldn’t have to pay higher taxes just because they use satellite instead of cable, or vice versa.

I’ve heard cable industry guys say they’d welcome “parity down” (the lowering of their franchise fees) over “parity up” (the raising taxes on satellite), but I’ve yet to see a concerted effort by cable to seriously wage a campaign to lower their franchise fees in Illinois. They’re defaulting to a stick-it-to-their-competitors tax hike, which is a shame for everyone involved.

I’m also not impressed with cable’s shameless ploy to sell the tax hike as being “for the children” by earmarking the money to education. For one, Illinois is spending more per student than ever before while test scores disappoint. Why should satellite TV subscribers see their taxes go up to fund more of the same?

Bottom line: Illinois politicians haven’t earned the right to hike our taxes. They haven’t gotten their spending under control, they haven’t paid down our budget backlog and they haven’t reformed pensions.

Illinois didn’t vote for tax hikes, and politicians have no mandate to engage in more tax-hiking nonsense.