Latest posts by Bartlett Cleland (see all)
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In early 68 A.D., Gaius Julius Vindex rebelled against Nero’s high tax policies. The rebellion was a success. On June 9th of 68 A.D, declared a public enemy, left without friends, and facing public execution, Nero, the emperor who “fiddled while Rome burned” committed suicide.
By Monday June 9th of 2014, Illinois Governor Quinn must approve or deny the scheme that may well have similar, if less dramatic, implications.
With more than $155 billion in debt and a projected annual deficit $3 billion in 2015, Illinois has certainly proven it can spend like Nero. Now Chicago is inviting the state to allow it to turn to increasingly more discriminatory and greater confiscatory heights of tax on mobile broadband.
Mayor Rahm Emmanuel has proposed to the State Assembly, which already agreed, and to the governor that Chicago be allowed to raise the 911 taxes on wireless by 56 percent to $3.90 a month per line. This follows a 2008 doubling of the tax, which is still in place despite being only added to pay for a failed Olympic bid.
Chicago is already one of the top ten most expensive cities for wireless taxes and fees, including the combined 14 percent state and city excise taxes. With the new tax Chicago would be the highest.
Ignoring the millions of dollars continuing to be collected to pay for that 2008 Olympic bid, Mayor Emmanuel claims that the 911 expenses have again exceeded budget. But the 911 fund argument is simply a cynical ploy to justify higher taxes. The mayor’s plan delivers far more revenue, at least 50 percent more, than he claims is “needed.” That additional money taken from citizens has no restrictions on how the mayor could spend it.
Shamelessly the mayor argues that the extra money can be used to pay the pension fund of city workers. But consumers expect the money to be spent on the 911 system, not supporting the city’s general slush fund, especially when a typical family of four will be paying well over $300 a year just in taxes and fees, almost enough for five kids to eat a subsidized school lunch the whole school year. It is exactly those families with the least resources who will be hit the hardest.
The effect of a discriminatory tax on wireless is clear. The use of mobile devices of all kinds has expanded rapidly, and the mobile industry has been punished for its success. Wireless makes it easier for us to stay connected, and makes us more socially and economically efficient. Those benefits are placed at risk when government discriminatorily taxes the industry.
Because of wild spending, and following a huge income tax increase, Governor Quinn either chooses this discriminatory proposal harming those in Chicago with the least ability to pay or must look to raise other taxes, such as property tax, where he sees a greater risk of jeopardizing his chance at re-election in November.
Mayor Emmanuel clearly has no concern over risking an innovative future for all in Illinois. Et tu, Governor Quinn?
[Originally published at The Institute for Policy Innovation]