Republican governor candidate Bruce Rauner is proposing a sales tax increase, and promising an income tax decrease. Rauner wants the income tax to revert to the 2010 level – that is, to fall from 5 percent to 3 percent – which he says should be done gradually over four years. The tax is already scheduled to fall to 3.75 percent, unless lawmakers take action. To generate a half-billion to make up for that, he wants to extend sales tax to services that he characterizes as luxury.
Click here for summary
“Non-necessities, like charter airplane flights, interior decorating, marina towing – they are tax-free in Illinois, while we tax necessities like clothes and shoes and furniture. We’ve gotta change that. We’ve gotta have a broader tax base,” he said. Services he proposes taxing include: Warehousing and storage, waste removal, travel agent services, advertising sales, armored car services, debt collection, commercial art and graphic design, commercial linen services, maintenance and janitorial services, marketing, printing, investment services, public relations, security guards, telephone answering services, lawyers, overnight trailer park rentals and golf club membership and fees.
The proposal he articulated does not contemplate exempting anything that’s taxed now, nor lowering the sales tax rate. The expected revenue – up to $577 million – still probably would not cover the loss in revenue from the income tax cut, but Rauner said there are ways to patch together a budget from year to year without losing sight of the long-term goal of having a tax environment that supports economic growth.
Rauner unveiled the tax proposal as part of a broader business agenda Thursday at a factory in Schaumburg. That agenda also includes less civil liability for businesses, less regulatory oversight and cheaper costs for worker compensation.