The governor didn’t mention taxes in his budget speech, but his proposal is still open to some increases. Applying sales tax to services was a campaign proposal, but it’s not simple, says Richard L. Kaplan, a law professor at the University of Illinois and an expert on taxation.
“With so many services, are we going to impose tax on all of them, or only on certain ones? Some services are used by everyday people every day, others are much more rarified and tend to be indulged in by people at the top end of the scale, such as armored car services, that sort of thing,” he said.
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Industries will vie to have their services not taxed, making a tax on some services difficult to accomplish politically, Kaplan says.
Kaplan also says taxing some retirement income is an option. The governor remarked on how high some state pensions are, but Kaplan says it’s not just government retirement income that is not taxed. The state does not tax any retirement income, including private-sector pensions or withdrawals from 401(k) accounts. A policy of taxing that over a certain level – perhaps $50,000 – has been discussed in Springfield for years, but has never been enacted.