Chicago is one of the greatest cities in the world, but I won't be visiting there unless it is on business any time soon. Starting today, Illinois' Cook county (which includes Chicago) raised the sales tax a point, pushing it to a nationwide high of 10.25%.
When neighboring counties have rates of 7 and 7.25 percent, why would Americans throw away an additional three percent of their money? A high sales tax in itself isn't a bad thing (note - fair tax,) but when there are other alternatives nearby, and the property and income taxes are still high, this will just take money away from local businesses. National chains may see a dip in profit for stores in the area, but will probably see it simply shift over to another store.
The story assumes a bit too much however:
The tax is estimated to bring in more than $440 million in new revenue.
That amount of extra revenue is based upon the fact that consumer spending will maintain the same rate, and that consumers won't go to other counties for a cheaper rate. In nearly every case, the government makes more money by cutting taxes, rather than raising them. When consumers need to spend less money on taxes, they will usually spend more money on goods and services. With the economy having problems, this will stifle, rather than stimulate the economy.
Thinking logically, by raising taxes, consumers aren't able to purchase as much as they would in the past. This lowers the profits made by mom and pop stores, which in turn could cause them to shut down business or cut back on expenses, which usually means employees. Either way, jobs will be lost, which equates to even less consumers, and the cycle repeats itself until there is a balance, which in turn means that more Americans are dependent on the government to provide for them.
Eventually, government will be taking a majority of your paycheck. Add this sales tax on top of Presidential candidate Barack Obama's proposal to raise that highest tax bracket to a rate of 52%, with the cost of property taxes, and we're basically giving everything we earn to the government - not the idea our Founding Fathers intended upon.
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