For your entertainment: Latest Chicago tax hike hits concerts, theater
November 13, 2017

For your entertainment: Latest Chicago tax hike hits concerts, theater

Mayor Rahm Emanuel’s proposed increase in the city’s amusement tax is nothing but the continued nickel-and-diming of Chicagoans.

Faced with yet another budget deficit, Mayor Rahm Emanuel and the Chicago City Council have decided to raise taxes again. This time in the form of the amusement tax on concerts and theater.

Currently, Chicagoans pay a 5 percent amusement tax on musical and theater events. Add to this the Cook County amusement tax of 1 percent on tickets to events in venues with seating capacity for 750 to 5,000 people, and 1.5 percent on tickets to events in venues with capacity to seat 5,000 people or more. The total tax can reach as high as 6.5 percent.

But if Emanuel’s plan is approved, larger musical and theater events will be taxed at a total of 10 percent or 10.5 percent, depending on the size of the venue, as the mayor’s plan would hike the city’s amusement tax to 9 percent on tickets to events in venues with more than 1,500 seats, according to the Chicago Tribune. Chicago’s amusement tax is already among the highest in the region, second only to Hoffman Estates, according to the Coalition to Save Jobs in the Amusement Industry. The increase will solidify Chicago as home to one of the highest amusement taxes in the nation.

The increased amusement tax, dubbed the “Hamilton tax” after the hit Broadway show, will price average Chicagoans out of the most popular shows. By increasing the amusement tax, the mayor expects the city to take in an extra $15.8 million on net.

While raising taxes on the tickets to shows in highest demand, Emanuel’s budget plan eliminates the amusement tax for shows in smaller venues. Nonprofits such as the Goodman Theatre and the Chicago Symphony Orchestra will continue to be exempt from the amusement tax under Emanuel’s proposal, according to the Tribune.

The mayor has pointed out that the new tax structure would not discourage musical acts from selecting more intimate venues. “I don’t think we should stifle the culture of our neighborhoods by taxing Thalia Hall in Pilsen or the Metro in Lakeview at the same rate we’re taxing a 40,000 seat concert venue,” Emanuel said in a statement reported by the Chicago Sun-Times.

However, the Coalition to Save Jobs in the Amusement Industry, which includes Chicago sports teams, the Service Employees International Union and the Illinois Restaurant Association, among others, has come out in opposition to this tax increase, noting it will drive shows out of Chicago, which will result in fewer visitors and fewer jobs. This comes at a time when the city is attempting to increase fees for restaurants. Combined, this means increased pressure on the city’s service industry.

The city budget has grown to $8.6 billion from $6.3 billion under Emanuel’s watch, and the narrative has been that these changes and tax increases were necessary to fix Chicago’s pension mess. “[O]ur pensions are on the path to solvency,” the mayor said in his budget address. But the Illinois Department of Insurance released a report in October showing the city’s unfunded liabilities continue to grow. Yet, Emanuel has chosen to place the burden on taxpayers instead of working toward reforms.

The Chicago area has experienced the largest population loss among the country’s largest metropolitan areas; the City Council should not be looking to increase an already exorbitant tax burden. Instead of nickel-and-diming Chicagoans, the city should be looking at reforms such as introducing a 401(k)-style alternative to failing city pension fundsaddressing city spending, and eliminating tax increment financing districts.

Unfortunately, the amusement tax simply raises the burden on a tax-fatigued city, and that’s no laughing matter.

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