In a recent Op-Ed for Townhall, Americans for Tax Reform Associate Tim Wilt exposes the nickel and dime tax policy being employed by Chicago Mayor Rahm Emanuel. The latest in Rahm’s onslaught of tax hikes is the extension of the “amusement services” tax to the digital marketplace. Starting in September Chicago residents will be on the hook for an additional 9 percent tax on services like Netflix, Xbox Live, and Spotify. Fighting to abate a $900 million overspending problem, Mayor Emanuel refuses to make the government reforms and spending cuts necessary, and instead continues to tax the already overburdened citizens.
Wilt reports:
“The new policy is predicted to generate $12 million in revenue, a drop in Chicago’s ocean of debt. But wait, there’s more. Combine that with other creative solutions from the mayor’s office like, the higher tax on parking spaces, the new tax on leased vehicles, and the new tax on personal property lease transactions, and we have a grand total of $62.4 million in new revenue!
Hardly enough to put a dent in the $900 million bill. These new taxes will not solve Chicago’s problems. They will, however, cripple innovation and investment in the city, establish a dangerous gateway for tax discrimination in the digital marketplace, and violate federal law, state law, and Supreme Court precedent.”
Uncertainty abounds with this latest tax hike and many have even questioned the $12 million revenue estimation. The new costs will hit Chicago citizens this September, following a moratorium on the new policy.
Chicago’s financial situation looks increasingly bleak as it speeds towards a $1 billion short fall in next year’s budget. Expert analysts have indicated that major tax increases will likely be needed to keep the city afloat. Mayor Emanuel has thus far avoided such tax hikes for fear of the political repercussions, but it is becoming ever more certain that his penny pinching policies will fail, and the tab for his administrations rampant overspending will finally come due.
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