The Southtown Star

Quinn's sales tax break contrasts income tax plan

Friday, August 06, 2010

Open your wallets, ladies and gentlemen. And don't forget your critical thinking caps. Friday begins the 10-day holiday pushed by Gov. Pat Quinn that will temporarily block the state's 5 percent sales tax on most back-to-school purchases. Consumers still will pay local and county taxes, but the state is repealing, briefly, its share of sales tax on hundreds of items, from glue and crayons to certain clothing items under $100.

Retailers are opening their doors early, hiring additional staff and prepping for a flood of shoppers during the 10-day window, and that's exactly what Quinn is touting. A sales tax holiday, he says, will boost the economy by beefing up the work force and encouraging shoppers to overload on supplies. Consumers will toss a few products exempt from the sales tax break into their bins as well.
Maybe Dad will grab a new fishing rod. Perhaps Mom will browse the jewelry aisle.

When cash registers start ringing, that's good news for the economy. Hurray!

But therein lies the rub for us. The state is $13 billion in the hole and sputtering on fumes. The unemployment rate in Illinois hovers around 11 percent. The number of families relying on food stamps is up 11.9 percent from last year, now reaching 780,000 families.

And yet Quinn and the retail community - the corporate discount stores still registering healthy, annual profits - are begging for us to spend, spend, spend.

Sure, we'll save 5 percent on certain items, but the savings likely will be lost on other purchases we wouldn't normally toss into the shopping cart. That's not exactly the fiscal discipline the state ought to be promoting.

Quinn says the reduction in sales taxes will encourage more spending and inject fervor into the state's economy.

That argument - fewer taxes equals greater economic growth - contrasts starkly with his other message, the one calling for an income tax hike. If he is promoting the economic paradigm that tax reductions grow the economy, does he believe the converse, that his income tax hike will contract the economy?

We'll be watching and asking.

In the meantime, feel free to take advantage of the savings starting Friday.

But keep your critical thinking cap in your shopping cart, too.