Barbers, lawyers could pay tax under Emanuel plan

September 28, 2011 2:52:11 PM PDT
Chicago Mayor Rahm Emanuel is floating a unique plan to help solve the city's budget problems. He is pushing a proposal to lower the sales tax, but the mayor also wants to increase the number of items and services that are taxed.

Under the mayor's proposal, everyone from barbers to lawyers will have to pay the sales tax.

"I'm not for a toll on Lake Shore Drive, I am not for a citywide income tax, I'm not for increasing property taxes, I'm not for increasing sales tax," he said.

After listing those four ideas that will not be part of his budget, Mayor Emanuel said his 2012 spending plan would include an effort to lower the retail sales tax while expanding the levy to include services.

"I am for lowering the sales tax and I, in fact, will have a tax cut that I committed to in the campaign in my budget," said Emanuel.

Last spring, mayoral candidate Emanuel talked about expanding the sales tax to include some luxury services that currently are not subject to the levy.

On Tuesday, the city's inspector general, Joe Ferguson, estimated that raising the sales tax to include services could generate another $450 million for the city, which has a projected $635 million deficit.

"When we're talking about services, the folks that use services tend to actually have more money," said Ferguson.

Any change in the sales tax formula would require approval by the Illinois General Assembly and the governor's signature. The mayor revealed Wednesday morning that part of the process is already in motion.

"I have advocated and I've talked to the speaker and Senate president about lowering the sales tax by expanding what is, in fact, taxed," Emanuel.

The mayor also hinted that he will make many Chicago churches and not-for-profit organizations begin paying for their city-supplied water.

"If you're willing to pay a $1.49 for a bottle of water, I think that for hundreds of gallons of water you would not mind paying a few pennies more," Ald. Howard Brookins, 21st Ward

The mayor said Tuesday that three of the suburbs that use city water but are millions of dollars behind on their bills have agreed to payment schedules. Alderman Brookins says there are some suburbs buying city water at the low price, then marking it up to sell to other suburbs. The bottom line: water is a source of revenue for the city of Chicago that is not being tapped.

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