Tax Transparency Wins!

by Mark Cavers Last week, Governor Quinn signed into law the Tax Disclosure Act, which instructs the Department of Revenue to provide information on all state and local taxes in a single, central online database. Under this law, citizens will be able to see every tax they pay with just a few clicks of the mouse....

by Mark Cavers

Last week, Governor Quinn signed into law the Tax Disclosure Act, which instructs the Department of Revenue to provide information on all state and local taxes in a single, central online database. Under this law, citizens will be able to see every tax they pay with just a few clicks of the mouse. Currently, taxpayers have to research layer upon layer of taxes and fees for each government body. A typical citizen might have to contact ten separate government entities to determine all of the different taxes they pay.

Why does this matter? Because between paying for water reclamation districts, park districts, school districts, villages, townships, and a litany of other taxing bodies, the true cost of government gets lost. If citizens don’t know how much they are truly paying then they cannot decide if the government services they are getting are worth it. Additionally, the combined state and local tax burden between two places in Illinois can vary greatly. For families and businesses on the move, they can now compare tax rates across geographic areas and make informed decisions.

The bill also requires that the tax rate information be available for mass download through the Department’s website. This allows private organizations to create valuable tools for comparing and presenting the data. The Freedom Foundation in Washington State used government-released data similar to this to create Taxsleuth.com, which allows Washington residents to use an interactive tax map and tax calculator to compare tax rates.

With this commitment to transparency, taxpayers will be able to see all the tax rates imposed by every taxing district and by the state in one central location. Rather than having to contact numerous different units of government, SB0043 allows taxpayers to go to the Depart of Revenue, or the website of a nonprofit which chooses to host the Department’s data, and see every different taxing district that they are paying into.

The Illinois Policy Institute commends the Governor and the General Assembly for this important step towards transparency.