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Tax Group Wants Tax Increase
The Center for Tax and Budget Accountability says if Illinois hopes to get itself out of the state budget hole, a responsible, progressive tax increase must be a part of next year's budget.

Executive Director Ralph Martire says a flat income tax increase combined with a broadened sales tax base would be the best and fairest way to increase revenues without big cuts in spending. Martire proposes giving lower- and middle-class families tax credits, so even though they’ll pay more taxes initially, they'll get most of that money back. He says this will stimulate the economy by putting extra money into the hands of people who will likely spend it in their local economies.

Martire says the current sales tax covers only goods, such as dishwashers and cars, which accounts for about 12 percent of all economic activity in Illinois. He says the state might not have to raise the sales tax rate if it simply taxes more things. He says the sales tax could cover roughly 60 percent of Illinois' economic activity if it begins taxing the service sector. He means services such as health club memberships, dry cleaning, and haircuts. He says this way, even if the state lowered the overall sales tax rate, it would still bring in more money.

(Illinois Radio Network)
03 12 09 by Newsroom
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