Reeder: Hidden taxes — we’re all paying, and it adds up
By Scott Reeder March 27, 2013 10:14PM
Someone pumps gasoline at the BP station at 35th Street and King Drive, Chicago, as average gas prices reached a record high in the area Monday, March 26, 2012. | John H. White~Sun-Times Media
Updated: April 29, 2013 11:44AM
When it comes to taxes, politicians like to be sneaky.
Sure, we all are aware of the federal and state income taxes that we file by every April 15.
And I’m far from alone in flinching when the property tax bill arrives every year.
But at least we’re fully aware when we write out those checks to the Illinois Department of Revenue or the county treasurer or collector that we are being taxed.
And if you are like me, you study those tax bills closely. You look to see if you’re paying more than the year before and if the tax rate has changed.
Politicians know this. They don’t want to get flak for raising taxes. So they try to sneak tax hikes into places where you won’t look.
For example, if you buy gasoline in Chicago you can expect to pay taxes amounting to about 90 cents for each gallon you pump into your tank, according to the Illinois Petroleum Marketers Association. The gas taxes are less in most downstate communities, but not by much.
Illinois law prohibits gas stations from advertising their prices without the taxes being included.
It would appear that politicians don’t want you to associate high prices at the pump with taxes going to the federal, state and local governments. They prefer that you direct your anger at Shell, Exxon and BP for higher gas prices — not government.
But the gas pump isn’t the only place where our elected officials pack in hidden taxes.
If you check into a hotel in Rockford, you can expect to pay a 12 percent lodging tax. The General Assembly is considering allowing Winnebago County to tack on another two percentage points to that tax to pay for better sports facilities. That’s a pretty steep fee.
Politicians in Illinois like the lodging tax because not only is it tucked down at the bottom of hotel bills, it’s mostly paid by business travelers and tourists — people who don’t live or vote in the community where the tax is imposed.
We may be nearly 237 years removed from July 4, 1776, but taxation without representation is still an appealing concept for many who have political power.
Many elected officials expect that Hilton, Sheraton, Hyatt, Ramada and other lodging companies will bear the blame for your bigger hotel bill — not them.
Seems about everywhere you look these days there’s a hidden tax. Utility bills, phone bills, cable TV bills, insurance bills all have a hidden tax or two or three.
And isn’t it interesting that those taxes are almost always at the very bottom of the bill where perhaps you’re less likely to notice?
Why all these nickel-and-dime taxes? Because government has an insatiable need for money, and it’s politically dangerous to boost major taxes such as those on sales and property.
Politicians think you’re too dumb to catch on to the fact that government is getting a cut here, there and just about everywhere.
Taxes should be three things — broad, low and transparent. Hidden taxes are none of those, but they sure can add up.
The secret political appeal of hidden taxes first came to my attention back in the early 1990s when I was a young reporter covering Moline City Hall.
The aldermen were looking for a place to generate revenue. They choose a 5 percent tax on all video rentals.
Why? Because they didn’t think anybody would notice.
It’s time to hit the erase button on this trend toward hidden taxes.
Scott Reeder is a veteran statehouse reporter and the journalist-in-residence at the Illinois Policy Institute, a nonprofit research group that supports the free market and limited government.