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

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.