Sales taxes are holiday gift that keeps on taking
Illinois imposes some of the nation’s highest sales taxes on holiday shoppers, and this year online shopping will no longer offer a break.
Holiday shopping this year will certainly feel more “normal” than 2020, including the same old high sales taxes.
Illinois’ average total sales tax of 8.82% is the seventh highest in the nation, up from the 10th highest in 2015.
Shopping in Chicago costs even more. It doesn’t cost you anything to walk down Michigan Avenue and admire the bright lights until you walk into any of the stores. Shoppers are left thinking twice about buying gifts after paying 10.25% in combined state and local sales taxes.
Additionally, online shoppers will face higher sales taxes this year compared to last. Thanks to the “Leveling the Playing Field for Illinois Retail Act,” online shoppers will face the full sales tax rate imposed in their hometown.
Illinois has options to lighten the tax burden on shoppers. For example, most services aren’t taxed in Illinois. That means buying a carton of eggs comes with sales tax but leasing a private jet doesn’t. Taxing goods and services could help lower the overall tax rate.
When sales taxes are too high consumers suffer, with low-income households suffering the most because the majority of their income goes to buying necessities such as food.
Time and time again, lawmakers have raised taxes without addressing the underlying issue: fiscal stress.
The pension crisis is the biggest hurdle to Illinois’ prosperity. Reforming the pension system would alleviate the burden instead of never-ending tax hikes.