SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
To subscribe to Capitol Fax, click here.
NFIB “will lead the fight” against Rauner service tax

Tuesday, Jul 22, 2014

* The NFIB’s Kim Clarke Maisch argued forcefully against a sales tax on services in a 2012 Crain’s op-ed

Advocates for higher taxes seem not to have learned from experience. Lawmakers and activists in Springfield have been pushing for years to expand the state sales tax to include services. And with another gaping hole in the budget, the temptation is getting stronger. Crain’s columnist Joe Cahill argued, based on various studies, that the state’s fiscal problems are the result of a “narrow” tax base that exempts “half of the state’s economy” from taxation.

There are two problems with this view: First, it fails to consider the relationship between taxes and economic activity. It is basic economics that higher prices result in lower demand. Higher taxes increase prices and therefore consumer behavior. Even President Barack Obama seems to understand. He thinks that higher energy prices will discourage the consumption of fossil fuels, and that subsidies for green energy that reduce its cost artificially will make it more attractive for consumers. It’s the same theory behind higher cigarette taxes, higher alcohol taxes and higher taxes for people who don’t buy insurance.

The point is that even the cheerleaders for higher taxes know that they change consumer behavior. Where conservatives want lower taxes to encourage consumption, liberals want higher taxes to dampen the demand for products and behaviors they don’t like. Whether that’s the proper role for government — to use the tax code to manipulate personal behavior — is a debate for another day. But there’s really no debate that higher taxes on the service economy will weaken the demand for services.

Mr. Cahill seems to dismiss this theory by stating, “Sorry, but I just don’t believe that Illinoisans will start cutting their own hair if they have to pay sales tax at the barbershop.” He may be right about haircuts, but many border communities for years have complained that folks are going across the state line to buy cheaper gas, cheaper alcohol and cheaper cigarettes. Isn’t it likely that if a service tax comes to Illinois, consumers will seek lower prices where they can find them, including across the border? […]

More than half of all of the jobs in Illinois are provided by small businesses. They can’t wave a magic wand and increase their sales by 6.5 percent, and their customers can’t give themselves a raise. Expanding the sales tax would hurt both groups precisely when we need more consumer activity.

* Joe Cahill followed up after Bruce Rauner unveiled his service tax plan

Mr. Rauner’s proposal to extend the state’s sales tax to services is a common-sense idea that would raise revenue while making the tax base broader and fairer. As I’ve written before, there’s no rational justification for levying sales tax on nail polish but not manicures. […]

A substantial segment of Illinois business, I should add, disagrees with me on this point. They’ll be no more pleased with Mr. Rauner’s stand. Here’s what Kim Maisch, Illinois director of the National Federation of Independent Business, has to say:

“The NFIB and our 11,000 small-business members have long been opposed to a service tax here in Illinois . . . no matter who is pursuing the idea. As we look at Mr. Rauner’s proposal in its entirety, there are certainly items we can also support. However, no matter who the next governor is, NFIB will lead the fight against any legislative effort to bring a service tax to Illinois.”

By opposing a powerful, Republican-leaning interest group on a contentious issue, Mr. Rauner shows a willingness to put the state’s overall welfare ahead of his own short-term political interests. That’s a rare thing in Illinois politics, and he deserves kudos for it.

That NFIB endorsement will be a must watch event. The group has fought tooth and nail against a service tax for decades and now Rauner has opened the door wide.

* By the way, the Illinois Chamber has also fought hard against a service tax over the years. That group is run by Ms. Maisch’s husband Todd Maisch. So far, he’s been very quiet about this Rauner plan, and his group is also in the midst of formulating its endorsements.

- Posted by Rich Miller        

  1. - Oswego Willy - Tuesday, Jul 22, 14 @ 11:25 am:

    Split household?

    To the Post,

    Rauner is going to have to navigate through some usual GOP or Business friendly groups to get to where he needs to be with the voters.

    When the money for these groups isn’t a factor, you go alone, however, money is one thing, lobbying against your proposals until November is another thing.

    Are the Chamber and NFIB going to be seen by Rauner as “part of the problem” in Springfield too(?)

  2. - Not Rich - Tuesday, Jul 22, 14 @ 11:29 am:

    IF, Rauner wins, March-April-and May will be interesting and fun.. It has been a while since we have had an R Gov and the gamesmanship will be great theatre. If the pension reforms blow up courtesy of the Supreme’s then every revenue/tax idea is fair game.

  3. - PublicServant - Tuesday, Jul 22, 14 @ 11:32 am:

    So Rauner supports a tax that hits little guys (including small business owners) much more than his hedge fund buddies, huh? Now there’s a shock.

  4. - steve schnorf - Tuesday, Jul 22, 14 @ 11:35 am:

    so NFIB and the Chamber might endorse Quinn based on objections to Rauner’s tax plan. When pigs fly! Just like the public unions might go with Rauner because of how Quinn has treated them. When HUGE pigs fly!

  5. - walker - Tuesday, Jul 22, 14 @ 11:37 am:

    ===”every revenue/tax idea is fair game”===

    Completely agree, except we are already there. They should have been “fair game” for at least five years now.

    The rejection of the pension reform law would just make an almost impossible situation even worse.

  6. - Yellow Dog Democrat - Tuesday, Jul 22, 14 @ 11:45 am:


    NFIB…probably not. Nor Chamber.

    But, the inter tubes are littered with enough quotes from both already that Team Quinn can make plenty of hay.

    It does give Democrats an opportunity to beat up Republicans on taxes.

    Actually, I am surprised my state rep hasn’t already announced his opposition to Rauner’s plan to raise the income tax back to 5% and tax small business out of existence.

    And, every single Republican taking Rauner cash is now tainted…

    “Joe Bob has taken hundreds of thousands from special interests who want to raise our income taxes and increase the sales tax by $600 million a year, driving up the cost of everything from groceries to gasoline.”

  7. - steve schnorf - Tuesday, Jul 22, 14 @ 11:49 am:

    the usual suspects will line up in their regular places and read from the same well-worn scripts they usually do. That isn’t a criticism, it’s reality: Rs endorse Rs, and Ds endorse Ds, and if you fail to take your stand you about have to hope the other guy wins, because your guy expects his enemies to screw him but not his friends, so his wrath could be something to behold.

  8. - Norseman - Tuesday, Jul 22, 14 @ 12:07 pm:

    It always the details that get you in trouble.

  9. - A guy... - Tuesday, Jul 22, 14 @ 12:21 pm:

    Don’t look now, but there is some Shaking up going on now as we speak. NFIB and the Chamber need to look responsive to their members. They’re fighting the good fight. They’ll never endorse Quinn whether Arnold Ziffle flies by or not.

  10. - ZC - Tuesday, Jul 22, 14 @ 12:39 pm:

    Wow that is one weak argument by NFIB above.

    1) “Taxes decrease consumption!” (Well, sure, but an anarchic road warrior state reduces consumption a lot more, except maybe for shotguns and crossbows. You have to tax something if you still believe in public goods at all. Furthermore, this is also a fairness issue where some businesses are inside the tax bubble, and others aren’t, with not much in the way of any coherent theory why. And a broader and less arbitrary base of taxes means you should be able to lower the rates across the board.)

    2) “We don’t believe in using taxes to do that liberal thing where you influence personal behavior” - EXCEPT consumption itself, or other things you happen to like (capital formation / investment by really rich dudes). Slight philosophical tension there.

    3) “Raise our taxes, and we’re leaving the sta–aaaate!” It never gets old. Maybe we need to start a grassroots campaign where every Democratic business owner outside Chicago threatens to relocate to Milwaukee or St Louis if Rauner wins (I realize many Republicans wouldn’t care about a mass Chicago exodus…)

  11. - Formerly Known As... - Tuesday, Jul 22, 14 @ 1:12 pm:

    == When pigs fly! ==

    steve has really been on point these past few days.

    Any day other than April 1st, these groups would go with a “no endorsement” in the race before “Quinn endorsed”.

  12. - Yellow Dog Democrat - Tuesday, Jul 22, 14 @ 1:20 pm:

    @ZC -

    If Team Quinn had any clue what they were doing, that is exactly what they would do.

    According to NFIB, 82% of small business owners oppose service taxes. It will not be hard to convince them that the Rauner Plan opens the door to expanding the sales tax to include everybody else.

  13. - Formerly Known As... - Tuesday, Jul 22, 14 @ 1:24 pm:

    == Mr. Rauner shows a willingness to put the state’s overall welfare ahead of his own short-term political interests ==

    Is that what he did?

    Or did he finally feel pressure to explain how he would address the billions lost from expiration of the tax increase? So he unveiled a recycled idea that addresses only a fraction of the problem in hopes of easing the pressure?

  14. - ZC - Tuesday, Jul 22, 14 @ 1:52 pm:


    Basically agreed, I don’t want to see Rauner win, except that speaking Democrat to Democrat (in this, err, private forum) I would be careful how I frame such attacks, because in a -different- context (one that included a healthy dollop of revenue from income, too, say) something along the lines of what Rauner proposes is (I have been convinced by Ralph Martire) not a bad idea.

    I think we’ve always got to factor (again, as part of the equation) the short-term electoral benefits vs the long-run cost of demonizing policies that could be, properly used, good for the state. We don’t want to go too far down the road the DC Republicans have taken (full-throated opposition to what is, in essence, their own good idea, namely Obamacare / the individual mandate).

  15. - Yellow Dog Democrat - Tuesday, Jul 22, 14 @ 3:54 pm:

    ZC -

    Quinn is down 10 to 15 points and we are just about through the third quarter.

    If he doesn’t start playing some actual offense, completing passes and first downs, there is no “long-run” for
    Pat Quinn.

    If he should manage to win re-election and sales tax modernization once again becomes part of the mix, “we will burn that bridge when we get to it.”

    But I do not see this package of Rauner’s passing anyway. If it does, it will be a structured roll call, and public opinion will be moot.

  16. - facts are stubborn things - Tuesday, Jul 22, 14 @ 5:07 pm:

    service tax is regressive. A progressive income tax would be better overall.

Sorry, comments for this post are now closed.

* Lawyers: Mayor Emanuel is "not a policymaker for the city"
* Duckworth has huge cash advantage
* SUBSCRIBERS ONLY - Supplement to today’s edition and a campaign roundup
* Good morning!
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's blog posts

Visit our advertisers...






Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

* [TA Deal] Get Samsung’s wireless charging pad for just $19! (72% off)
* It only took two weeks for the iPhone 7 and 7 Plus to seize 43 percent of Q3 US iPhone sales
* Apple's Website Hints at Apple Pay Coming to Germany
* Thieves Rob Apple Store in Massachusetts and Get Away With $13,000 Worth of iPhones
* Verizon reports revenue drop but ‘continued strong profitability’ in Q3 2016
* Jide strikes again, already achieving Kickstarter goal for 4K-enabled ‘all-in-one’ Remix IO
* This is not a drill: Android 7.0 Nougat rolls out for Moto G4 and G4 Plus in India

* International draft stands to benefit White Sox
* Davidson reflects on 'whirlwind' 2016 season
* Starting pitcher rankings: White Sox have four of them
* Podcast: 2016 Chicago White Sox Infield Review
* White Sox Rumors: Sox hire Chris Getz as new Director Of Player Dev...
* Source: Getz to oversee Sox player development
* Awakening from denial: A Sox fan's journey through dark Cub-winning...


Main Menu
Pundit rankings
Subscriber Content
Blagojevich Trial
Updated Posts

October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005


RSS Feed 2.0
Comments RSS 2.0


* The cost of Rauner's loose bankruptcy talk - Ch.....
* Illinois Unemployment Down And Steady, Yet Stil.....
* Illinois Unemployment Down And Steady, Yet Stil.....
* Overcrowded Prisons and Overdue Criminal Justic.....
* Election Spending Examined - Alton Daily News..

* Men caught with 128 pounds of pot convicted in Nebraska
* Boy realizes goal of headstone for father he never knew
* EXCHANGE: Urbana man uses irony as he recalls Vietnam
* Police to meet with U of Illinois students after shooting
* Suburban Chicago coyote sightings increase in winter
* Retiring Wrigley Field scoreboard operator has seen it all
* Retiring Wrigley Field scoreboard operator has seen it all
* Judge: Illinois inmate's hunger strike is protected speech
* Wooded Island in Jackson Park reopening after improvements
* 4 artists to have works displayed at Chicago rail stations

* SIU injury-prevention program reinstated through stopgap budget
* Survey: 386 state jobs could relocate to Springfield
* SIU injury-prevention program reinstated through state's stopgap spending plan
* Illinois unemployment rate holds at 5.5 percent
* Loose ceiling beam in Coliseum led to closure
* Proposal would ban agency directors from campaign ads
* Illinois State Fair Coliseum closed due to structural deficiencies
* State fairgrounds Coliseum temporarily closed due to structural deficiencies
* Illinois agency: YouTube glitch behind training video porn
* Corrections officers call for increased safety at Logan County prison

* What United's CEO needs for the holidays
* Chicago has a new 800-pound gorilla in health care
* Illinois Tool's great job just isn't good enough
* Illinois secure in election readiness despite database hack
* Full of Obamacare patients, Rush Oak Park eyes new $30 million ER

* Joan Baez remains committed to music, social causes
* Illinois’ smallmouth bass record: In Lake Michigan for the chase
* Is your neighborhood a parking ticket hot spot? Check our map
* 2 firefighters treated after 5-alarm fire in Little Village
* Today at Chicago International Film Festival: ‘Karl Marx City’
* 55-year-old man with dementia reported missing from Park Manor
* Man grazed in South Side shooting
* Here comes Game 6 at Wrigley in NLCS, both a thrill and a terror
* Three-and-Out: Rookie RB Jordan Howard struggles again for Bears
* Optics illusion? Lackey growls, young Cubs shrug it off, win 2

* Apparent hack disrupts Internet service in large parts of East Coast, Midwest
* Federal investigation of Lincoln-Way still 'active,' superintendent says
* U.S. confirms 11th death due to Takata air bags
* Firefighters working to put out fire in Little Village
* 10 thoughts on the Bears' 26-10 loss to the Packers
* Morning Spin: Preckwinkle cagey on Emanuel's police performance
* Long-simmering food truck fight heats up on Chicago streets, in court
* Wrigleyville becoming refined, redefined
* Unique Northwestern program helps lawyer fighting to keep ability to speak
* 'Front Page' on Broadway with Nathan Lane: No need for rewrite!

The widget AQL4JYGHIY powered by Feed Informer does not exist.

* SIU injury-prevention program reinstated through stopgap budget
* Survey: 386 state jobs could relocate to Springfield
* Our View: For circuit judge, Cadagin, Troemper are endorsed
* SIU injury-prevention program reinstated through state's stopgap spending plan
* Illinois unemployment rate holds at 5.5 percent
* Loose ceiling beam in Coliseum led to closure
* Proposal would ban agency directors from campaign ads
* Bernard Schoenburg: Judge candidates investing in their own campaigns
* Eugene Robinson: Can we please just fast-forward to Election Day?
* Ray LaHood and Ed Rendell: Vote 'yes' on roads amendment

* EX-ambassador: U.S. needs more leadership on foreign stage
* Seniors find an easy-going friend in SilverSneakers yoga
* Traffic moving again on Empire after crash
* Podcast: Broadcaster Dave Shaul 10-21-16
* Light damage in Moline motel fire
* Change atop D-W schools
* What's In A Name? I-57
* Amazon updates expand user options
* Time for the old to move for new
* Head start on coach firings

* Cubs beat Dodgers 8-4, head home with 3-2 lead in NLCS
* A giant nude statue in California is stirring controversy
* Soyuz capsule docks with International Space Station
* Carter to meet with Turkey leaders, stress Iraqi sovereignty
* New Jersey Transit's longest delay: Modern safety technology

* House lawmakers overcome hurdle on key tra...
* Rodney Davis talks funding with Bloomingto...
* The agency that fought Illiana gets a new ...
* Rep. Dold takes educational cruise down Ch...
* Lawmakers decry high turnover rate of VA h...
* CBD Oil, and politics
* Simon considering state Senate bid
* Killer Congressman Tom MacArthur trying to...
* Shutdown? State may not notice
* Rep. Bob Dold

* US Sen. Dick Durbin urges big pharma actio......
* The Daily Northwestern : U.S. Sen. Dick Du......

* GOP senator in Illinois braces for fallout......
* Chicago Tribune endorses Mark Kirk's chall......
* Sen. Kirk and Rep. Duckworth Chastise Trum......
* Duckworth outraises Kirk in last quarter -......

* How Does the Minimum Wage Work?
* Knight: The Last Real Election
* Illinois REALTORS® expands Consulate General Liaison roster
* Illinois REALTORS® urge voters to reelect Sen. Rezin
* Illinois Review's favs for second week of October 2016
* Trump supporter reported on cancelled Chicago rally agitators in March
* Bucktown Man Arrested After Mugging Woman At Gunpoint, Resisting Arrest
* Peter Out
* The Jerk Stop Celebrates Its Grand Opening With 20% Off Your First Order
* Transportation coalition spends nearly $3M on ads for guaranteed public funding

* Illinois Partners with State of Telangana, India to Strengthen Smart State Initiatives - State to state agreement to accelerate opportunities and service to citizens
* Illinois EPA Announces Vehicle Emissions Testing Network Updates - New Contract to Offer More Efficient, Less Expensive Tests
* Annual Training Underway For Gas Station Owners, Service Technicans
* Governor Rauner Announces Recommendations from Health Care Fraud Elimination Task Force Report
* Annual Training Underway For Gas Station Owners, Service Technicians

      Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller