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Sales Tax: How Will it Affect You and Your Business?

Posted by Lauren Calomino on Tuesday, July 15, 2008

With most prices on the rise, many people are probably thinking, how can it get any worse? Well it can. In Illinois, on July 1, 2008 Cook County's sales tax has gone up to 10.25 percent which is now the highest of any major city in the country. With our struggling economy, no county in the United States is safe from increasing prices including sales tax.

Todd Stroger is currently the Board President in Cook County, Illinois. The reason behind the tax increase in Cook County is to fund the Stroger Administration's massive $150 spending increase over last year's budget which includes more than 1100 new county employees. So where is this massive amount of spending money going? Well, the Daily Herald newspaper explains claims that Stroger promised during his visit to Palatine and whether or not they actually are true. A truth behind what Stroger said is that Cook County provides police patrols, plowing and road services, Vista Health Care clinic services, infectious disease control and many other services to the North and Northwest suburbs. Most of what Stroger said, however, came out to be false. Stroger stated that Administrators cut departments 4 percent this current budget year. In reality that figure was a reduction from the proposed increase Stroger wanted to give departments. The actual dollar amount for most departments still increased, just at a rate lower than what he originally proposed. Another one of his claims that was proven to be false is that "The 8 percent (of the budget) that is under the president's control, just about all of that is designated for the suburban areas." The article in the Daily Herald then goes on to say "A Cook County spokesman had no immediate explanation of the claim, but it seems to stem from the fact that Stroger's office controls departments like Building and Zoning or Animal Control, which only provide services in the suburbs or unincorporated areas. But many more departments, like the Juvenile Advisory Council, the Medical Examiner, the Public Defender, The Veteran's Assistance Commission, the Cook County Law Library, The Department of Human Rights, Public Affairs and others serve both Chicago and suburban residents."

I am sure many people have different opinions on what can be done to change these tax increases. I guess one alternative that is possible is to cut back on government programs and services. However we would be losing some important services in the county. The question is, would you rather lose these services or pay higher taxes? I just can't believe though that with our struggling economy, where most people are having a hard time paying their bills, our government feels the need to raise taxes.

Consumers could go against this tax by shopping in surrounding counties, but it wouldn't protect their pockets as high taxes are everywhere. This would then affect an innocent business owner who is trying to keep their business up and running in Cook County. This will not only affect the business owner but can then become a problem with the money they are able to bring home to support their families.

Since sales tax is becoming more of an issue, Internet shopping may become increasingly popular with consumers. Depending on where you live and what online store you buy through, you might not have to pay a sales tax. If this is the case most people who live in an area with high sales tax will probably benefit more from online shopping. This way if there is a sales tax online, it would be the same for every consumer even if they live on the opposite end of the country. If someone were to go purchase the same item in the store as they would online, they could possibly be paying a much greater amount due to the high sales tax in the county they live in. Some websites, including Amazon.com, never charge a sales tax. This is one of the reasons online sales continue to grow. This could be considered unfair competition for local businesses. This, unfortunately, is one of the negative outcomes of Stroger's actions.  This is also proven to take away sales tax revenue from public agencies. The loss of local sales tax revenues is a serious problem. When sales tax revenue declines, local citizens must pay the price, either in diminished services or increased taxes. Also, the competition factor for online shopping starts many other issues. When local businesses shrink, jobs are lost and companies don't spend as much for everything in the local economy from site costs to advertising.

No matter if you are a consumer or a business owner, the increase in sales tax is going to affect you in some sort of way. I don't see this issue becoming better any time soon. Everyone just needs to find an alternative that is right for them and realize their actions not only affect themselves but everyone around them.

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Lauren

Tags: taxes, small business, budget, sales tax, sales

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Reader Comments


Wednesday, July 16, 2008 at 8:40 AM
J-rizzil says:

As far as I know people who use Ebay have to pay the tax if they hit a certain level of profit from there sales. My mother was a power seller for a number of years selling new clothing online and she simply kept reinvesting into her businesses stock to avoid having to pay allot of taxes. So its not to much of an advantage for small business owners in a local area and online sales could be a way for lots of small local businesses to make some extra scratch.

I know several small retail store that I frequent that could sell on Ebay or another venue and do quite well for themselves. Back to the main issue that is this tax hike, I live in Cook County and the sales tax is horrible I literally avoid buying anything in the area for just that reason. Look around we live in the American dream in Cook County well manicured lawns and big suv's and even the occasional Porsche and plenty of other high end vehicles and houses that are huge even by American standards. I think I'm part of a very select group that would even notice enough to make a change for this tax (I simply hate wasting money)and most of them won't even notice the (to them) small amount of money it will drain from those wallets.

Government will take what you let them take and will go after what they feel like they could try for so I would say that the residents of Cook are the ones to blame and its the area and its there choice so if you would like to blame someone for any businesses closing blame the residents of Cook. Because of how we as a people view life, the rise of Wal-mart and other big MEGA boxes and the total merchandising show how much we crave materiel and comfort and our government is just doing what we want they are making us more and more "safe" and "comfortable". In order to improve our "standard" of life they give us more, more police more flowers in our down towns and more fire works on the fourth of July and brand new marble for our court houses.

Wednesday, July 16, 2008 at 10:36 AM
KM says:

Thank you for bringing this up! The taxes in Cook County are insane! The writer is correct in pointing out that the taxes don't seem to be justified very well by Stroger, leaving those of us in Cook County to wonder what, exactly, we are paying for...

Thank you, also, for pointing out the advantages of online shopping. I question why anyone would want to drive to a store (with gas and taxes being so expensive) when he or she could easily avoid some of those fees by shopping on Amazon.

And to the previous poster, I, too, find it ridiculous the things the city will spend money on to make us "comfortable"...I am fine with increasing the police, as that is an issue of public safety, but the flowers and fireworks do seem to be a bit much when so many people in Cook County are without jobs.

Thanks for giving me a chance to rant- great article!

Wednesday, July 16, 2008 at 1:45 PM
anonymous says:

As an eBay seller you are technically supposed to pay tax on everything you sell. You do not have to pay sales tax from on online retailer unless they are selling from the same state that you are in.


A sales tax of almost 11% is outrageous. My double cheeseburgers at McDonalds will now cost me $1.11, with eleven cents going to do what? The roads here in cook county are still awful, I can't even drive down certain roads the potholes are so bad. They say the economy is getting worse and worse so they decide to help out by raising taxes? Yaaaay whoever made that decision.

Friday, July 18, 2008 at 9:01 AM
Elisbeth Rooney says:

Thankfully I reside in Stephenson Cty where the sals tax only just hit 8.25%. However I don't shop here. I have found that not only are sales taxes lower but so are gas prices by more than .25 per gallon if I drive 22 miles north to Monroe, Wi.

Yes it is probably bad for our states economy, however on a income of less than 700. per month a person has to save money on the necessary things in whatever way they can.

As for online businesses not having to charge taxes, I beg to differ. I own a gift and collectibles business which I operate solely online and I am indeed required to collect taxes from anyone who does business with my shop if their shipping address is in IL. However I am only required to collect the State tax I do not have to differentiate for each county in the state.

Friday, July 18, 2008 at 4:32 PM
Lizard says:

Great Article!!! Great Job Little Rhino!!! I Love You Forever!!!


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