SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
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        


16 Comments
  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:

    Schnorf:

    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:

    YDD,

    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.


TrackBack URI

Sorry, comments for this post are now closed.


* Vast Majority of Illinois Voters Support Renewable Energy, Energy Efficiency
* Inducement or just a party?
* Question of the day
* UPDATE: $580 MILLION EXELON RATE HIKE?? Do They Really Need a Bailout After Making Nearly $1 BILLION In The Last 90 Days?
* Very late Rauner oppo
* *** UPDATED x2 *** And speaking of abortion...
* GOP defends Rauner on "employer-provided birth control"
* SUBSCRIBERS ONLY - Friday morning fundraising report
* It's not anything new, but that doesn't make it Kosher
* Polling averages, models, projections, etc.
* Today's number: $3.5 million
* Rauner makes "Top 10" robocall list
* SUBSCRIBERS ONLY - Cable TV buy report and a spending update
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............


Search This Blog...

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

Search the 98th General Assembly By Keyword

          
        * Unknown 9.2-inch Xiaomi tablet listed on GFX Benchmark
        * Evernote Rolls Out Its New “Work Chat” Feature
        * D&D classic Icewind Dale: Enhanced Edition launched
        * HTC jumps on the quick-charging bandwagon with Rapid Charger 2.0
        * The Week in iPhone Cases: Extreme protection, yet still functional
        * HERE update: building footprints, better Chicago transit info
        * Microsoft says new Office for Mac due in 2015, unveils new Outlook app

        * Michelle Phan Is Building a Beauty Empire (Full Session Video)
        * A clue to Pinterest’s growth plan can be found in the company’s new profile page design
        * Virgin Galactic’s SpaceShipTwo space plane destroyed after ‘in-flight anomaly’
        * Google’s Dinosaur Easter Egg Now In Chrome Beta For Android
        * Microsoft to Update Office for Mac Next Year; Mac Outlook Gets Refresh Now
        * How Facebook made News Feed 50 percent faster on iOS
        * This Interactive Guide Tells You the Right Beef Cuts for Any Meal

        * White Sox opt to decline Paulino's '15 option
        * White Sox have flexibility to pursue multiple upgrades
        * White Sox offseason plan roundup: Third base
        * Minnie Miñoso belongs in the Hall of Fame
        * Development of young core in '15 can define Chicago's future
        * Abreu leads White Sox GIBBY hopefuls with five noms
        * Allen, Wills among new faces on Hall's Golden Era ballot


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        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

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * How to Get a Government Job in Gov. Pat Quinn's.....
        * Illinois pledges another $10 million to I-74 br.....
        * Moran: Mailboxes can exhale with end of electio.....
        * Former Gov. Jim Edgar to campaign with Bruce Ra.....
        * Topic matches for "campaign"..
        * Quinn, Rahm thank Safe Passage workers..
        * Diana Rauner talks about candidacy of husband B.....


        * Sun-Times owner sells suburban papers to Tribune
        * Chicagoan sentenced for robbing, beating 78-yr-old
        * Sun-Times owner sells suburban papers to Tribune
        * Former Northwestern researcher settles fraud suit
        * Off-duty Chicago police officer beaten, robbed
        * AbbVie hikes forecast, tops Street expectations
        * Illinois Dems dig deep to keep governor's office
        * Illinois schools report has host of new features
        * A look at Ebola guidelines in some states
        * 3 die when train strikes SUV in southern Illinois

        * Former Gov. Edgar to campaign with Rauner
        * Attorney general seeks clarifications from Topinka’s former nonprofit
        * Inmate freed from Jacksonville prison in landmark Illinois case
        * Cross opposes income tax hike extension
        * Gay marriage, abortion issues take back seat in governor’s race
        * Madigan’s office seeks clarifications from former Topinka nonprofit
        * Cross says no to income tax hike extension, sales tax on services
        * Gay marriage, abortion issues take backseat in governor’s race
        * Illinois inmate freed in landmark capital punishment case
        * Rauner says women will decide governor's race

        * Chicago Marathon champion fails doping test, agent says
        * Since Shire deal collapsed, AbbVie's probably done with mega mergers
        * Mead Johnson stock falls on Danone's China deal
        * Groupon rises on Asia news, 3Q profit
        * Danone's China deal quiets speculation on Mead Johnson buy


        * Garcia: I'm a serious mayoral candidate, not just a protest vote
        * A higher standard of criminal justice
        * Ex-Northwestern doctor to pay $475K to settle fraud claims
        * Sad day  when  Catholic  schools  close
        * Chicago bead merchant Ronnie Klein, whose Loop business drew stars, dead at 65
        * Chicago bead merchant Ronnie Klein, whose Loop business drew stars, dead at 65
        * Durbin, Oberweis square off for final time
        * State’s attorney investigating alderman’s prize offer to voters
        * Face it: Animator has found a great way to pass time on his commute
        * Refund those unfair yellow-light tickets


        * Ex-deputy pleads guilty to more child sex charges
        * Man gets 28 years in robbery, fatal attack on senior
        * Cook County Sheriff: Man missing near south suburban forest preserve
        * Pipe fitters tout Emanuel support with billboard
        * Wind and snow lead to cancellations and delays at O'Hare
        * Aviation chief: O'Hare noise problems won't go away
        * Workman's comp claim against Bears complicates Avellini DUI case
        * 2 students suffer chemical burns at UIC campus
        * Lawsuit: 3 Des Plaines men fell ill after hunting, eating wild boar
        * Metra reports delays on Union Pacific North Line


        * Making Buildings Healthier From The Inside Out
        * Scary Story: Planes By Ted Morrissey
        * Listen to State Week - October 31, 2014
        * "Monster Mash" Celebrates Halloween With Classical Music
        * The difficulties of getting voters invested and informed about elections
        * The Study Guide: Top issues in the candidates' own words
        * Ebola Strikes Race For Governor
        * Scary Story: To Have & To Hold By Jessica Hagemann
        * Aldermen skip chance to ask about city’s handling of police commander
        * Aldermen skip chance to ask about city's handling of police commander


        * Former Gov. Edgar to campaign with Rauner
        * Esther Cepeda: Elizabeth Pena: Trailblazer on the big screen
        * Andy Shaw: Voter turnout instrumental to reform
        * Ty Fahner: What if the Court rejects pension reform?
        * Attorney general seeks clarifications from Topinka’s former nonprofit
        * Quote of the Day: Friday, Oct. 31
        * Inmate freed from Jacksonville prison in landmark Illinois case
        * Cross opposes income tax hike extension
        * Gay marriage, abortion issues take back seat in governor’s race
        * Illinois inmate freed in landmark capital punishment case


        * Arrowhead wants to make you feel at home
        * Sergio McClain welcomes opportunity
        * Who's in the news? Mary Ellen Chamberlin
        * Former Gov. Jim Edgar set for campaign swing with Rauner
        * Edgar to campaign with Rauner; rally Monday in Bloomington
        * Band concert Sunday to feature traditional and modern works
        * Journal-Courier Top Five
        * Five things to do this weekend: Run, shop inside and out, drive, change the clocks
        * Collabortive pianist Maertin Katz presents classes, lectures, recital
        * 3 die when train strikes SUV in Vandalia


        * Prep football playoff games streaming live tonight
        * Lake County jury to decide whether woman was kidnapped, sexually assaulted in Beach Park motel
        * 5 post-Halloween things to do this weekend
        * Kaneland's Swithers plays through torn ACL, inspires teammates
        * St. Peter Lutheran School celebrates 150 years in Arlington Hts.

        * Patrick Cannon defense strategy rare but n...
        * Feds fine Jesse Jackson Jr.'s campaign com...
        * Ex-Congressman Jesse Jackson Jr. faces sen...
        * Representative Jan Schakowsky Sends Letter...
        * Rep. candidate pushes to uphold marriage b...
        * Reps. Schakowsky and Waxman Introduce Bill...
        * Statement by Representative Jan Schakowsky...
        * U.S. House Passes Resolution Condemning An...
        * FAA Rejects Call For New O'Hare Noise Stud...
        * Representatives Quigley, Duckworth, Schako...

        * Oberweis gearing up to take on Durbin in m......
        * Quinn, Rahm thank Safe Passage workers...
        * Oberweis gearing up to take on Durbin in m......
        * Quinn, Rahm thank Safe Passage workers...
        * Education Dept. cracks down on for-profit ......

        * If Republicans Take Senate, Why It Won’t Last...
        * Why a GOP Senate could be short-lived...

        * Facebook To Host Q&As With Illinois Gubernatorial Candidates
        * North Side Chicagoans Open Community-Funded Mental Health Center
        * Illinois Congressman Schock Visits the United States Air Force Academy
        * Vagina Dialogues: Rauner, Quinn battle in the bedroom as campaign raps up
        * The College Football Report Top Ten: Army Training, Sir!
        * Prayer today & tomorrow
        * Obama Votes In Chicago So His Ballot Will Be Counted 27 Times [video]
        * We Ask America Launches Illinois Turnout Tool
        * SportsMonday: Bye-Bye Bears
        * The College Football Report: Huffing Paint And The HAL 9000


        * Editorial: Governors, raining taxpayer $ on Illinois
        * Governor Quinn and Mayor Emanuel Thank New Safe Passage Workers - Nearly 700 Additional Workers Hired This Year to Serve 133 Schools, 69,000 Students Across the City
        * Editorial: Rauner best choice as governor to begin to reverse Illinois’ fortunes
        * Quinn to celebrate Rauner’s UI Labs accomplishment
        * Another Democrat Runs Away From Pat Quinn




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