PI Original Josh Kalven Monday November 24th, 2008, 10:08am

Meeks Wants To Reverse Sales Tax Skimming Policy

Last week we highlighted
a fairly simple policy fix that could generate a significant amount of
additional revenue for the Prairie State without raising taxes. If the
legislature would just cap the amount retailers receive for simply
collecting sales taxes, the state ...

Last week we highlighted a fairly simple policy fix that could generate a significant amount of additional revenue for the Prairie State without raising taxes. If the legislature would just cap the amount retailers receive for simply collecting sales taxes, the state coffers could stand to gain millions each year.

Not surprisingly, the retail lobby doesn’t like the idea much. But it turns out that Illinois treats its store owners nicer than most. Last year, for example, the state gave away more than $126 million of its sales tax haul to businesses -- more than any other state in the nation.

Tired of penny-pinching for school programs and social services, Sen. James Meeks (D-Calumet City) is out to stem the loss of tax revenues. On Thursday, he introduced a bills that, if passed, would eliminate the "retailer's collection allowance" to ensure the state hangs on to the 1.75 percent in sales tax revenue it’s been giving away, much of it to big-box retailers like WalMart.

It turns out that the Center for Budget and Accountability’s Ralph Martire previously pushed for similar legislation. Intense lobbying by retailers won out, according to Meeks. Still, the South Side minister and school-funding reform advocate isn’t deterred.

He told us on Friday that the chances of passing the bill “are great.” He explains why: “The state is cash-strapped and here’s a way to get money out of doing nothing.”

Meeks wants to see the additional funds go toward hiring truancy officers who will make sure high schoolers are making it to school each day. He also wants more spent on early childhood programs.

Critics argue that taking the money away from retailers would hurt them at a time when business is down, but Meeks tells us he’s not buying it.

“I think Wal-Mart can afford it,” he said. “People have to pay their taxes. They can’t get around it when the economy is bad.”

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