Chico and Emanuel tangle over sales tax proposal
By Abdon M. Pallasch Political Reporterapallasch@suntimes.com January 28, 2011 6:32PM
Gery Chico | Rich Hein~Sun-Times
Updated: April 30, 2011 4:47AM
Mayoral candidate Gery Chico appeared at a Hyde Park barber shop Friday to announce that middle-class taxpayers would get clipped from what he called a “sales tax hike” proposal from rival Rahm Emanuel that Chico said would include hair cuts.
Chico called it the “Rahm Tax.”
Here’s the problem: Emanuel actually proposed a 20 percent cut in the city’s sales tax. Emanuel said he would extend the sales tax to “luxury” services such as limo rides and Botox injections so the city would not lose money on the cut. Emanuel said he would not include hair cuts.
“I said there are things that are excluded ... I’m not part of hair cuts and that — that’s not what I’m proposing,” Emanuel said.
Here are the “luxury” items not subject to sales tax now that Emanuel would ask state legislators to subject to sales tax: rides in corporate jets and limousines; elective cosmetic surgery such as Botox injections, pet grooming; health club and private club memberships.
At Thursday night’s debate, Chico also suggested Emanuel would extend the sales tax to cover child care. Emanuel said he would not.
Chico said Emanuel is only giving taxpayers a small peek into the list of services to which he would extend the sales tax — that the limited number of services Emanuel has listed would not add up to the $45 million lost by lowering the city’s sales tax rate from 1,25 percent to 1 percent. (Together with the state and county taxes, that’s about 9 percent sales tax.)
Chico handed out a list of services previously proposed to be taxed the last time state legislators proposed broadening the sales tax base. Emanuel said he has no connection to that list, calling it “fiction.” But Emanuel admitted he’d have to negotiate with state legislators about what would be added as “luxury” services to be taxed.
“You work with the legislature on coming up with the list — I can’t dictate to them,” Emanuel said. Past attempts to tax services de-railed over attempts to tax lawyers and accountants. Emanuel said he would not attempt to include them.
Chico challenged Emanuel to produce an exhaustive list of services Emanuel considered “luxuries.”
“You consider pet grooming a luxury? You’re going to tell people waiting in line at Petsmart to get their dogs nails clipped that that’s a luxury?” Chico asked. “If you think limousine drivers are rich people, I’m here to tell you they’re not. These are hard-working people. Maybe they have one car. Maybe they have two cars. They’re trying to make ends meet.”
Outside Ron’s Barber Shop on South Harper, someone toyed with Chico’s campaign by sending a stretch limousine with posters on it that read, “Gery’s tax-free ride.”
The limo driver would not say who sent him. Asked if Emanuel’s campaign sent the limo, Emanuel spokesman Ben Labolt said, “Can you quote me winking?”