As the early debate over how much to raise the sales tax in Bloomington Normal and for which causes advances in coming months, one item that likely will not play a big part of the discussion is who such a tax hits the most. City Manager Mark Peterson agrees that economists label sales taxes regressive because the burden falls disproportionately on lower income people who spend money only on what they need and have less discretionary money.
"There are basic needs that everyone has to meet; groceries, medication, clothing and things like that. Irrespective of income levels, you are going to have to purchase those items and they are all subject to sales tax."
Peterson says few in the public understand the difference between regressive and progressive taxation any more.
"I don't think that particular discussion has been or will be part of the public debate about whether it is appropriate to increase the sales tax."
Supporters of sales taxation such as Mayor Chris Koos of Normal note that the middle class and wealthy actually generate more sales tax revenue for governmental bodies because they spend more. But, lower paid people spend far larger portions of their income on sales tax than more affluent citizens. The community is just starting public discussion over potential new revenue streams to support schools, buses, Youth Soccer and the YMCA.
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