\n\t\t\t\tChicago-area sales taxes were already No. 2 in the U.S., but new taxing authority handed to the Regional Transportation Authority will raise them to No. 1.
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Chicago\u2019s 10.25% combined sales tax currently ranks second among major cities, behind only Seattle\u2019s<\/a> 10.35%, but a 0.25-point hike for transit will make them the highest in America.<\/p>\n The new Regional Transportation Authority funding bill, which increases the Chicago metro area sales tax by 0.25 percentage points<\/a>, has passed both chambers of the Illinois General Assembly and now sits on Gov. J.B. Pritzker\u2019s desk. Once signed, it will give Chicago the highest sales-tax rate of any major city in the nation at 10.5%.<\/p>\n<\/p>\n Chicago\u2019s current sales tax is broken down into four categories<\/a>:<\/p>\n Under the bill, the RTA portion of the tax will rise<\/a> from 1% to1.25% in Cook County starting June 2026. In the collar counties it will increase from 0.75% to 1%.<\/p>\n Now that this bill has cleared the state legislature, Pritzker will have 60 days<\/a> to sign it into law.<\/p>\n Pritzker previously said he will veto any broad-based<\/a> tax hikes impacting working families, but has signaled support<\/a> for the transit sales tax increase. The tax will apply to six counties<\/a>: Cook, Lake, McHenry, Kane, DuPage and Will. These areas are home to about two-thirds of the state\u2019s population.<\/p>\n Economic consequences<\/b><\/p>\n Sales taxes tend to hit low-income households<\/a> the hardest, because a larger share of their incomes go towards basic necessities. Those will cost more under these rates.<\/p>\n High sales taxes relative to neighboring areas also lead to high rates of avoidance<\/a>: residents shopping across state or county lines to save on taxes. This practice tends to hurt local economies and businesses that lose out on customers. This problem is already evident<\/a> in Chicago, where neighboring suburbs and states such as Indiana offer substantially lower rates.<\/p>\n Public sentiment<\/b><\/p>\n Recent polls show high taxes are the No. 1<\/a> concern for Chicago and Illinois residents. Polled voters have repeatedly said taxes are already too high, and many have moved to lower-taxed states as a result. High taxes are one of the key drivers of Chicago\u2019s population decline and broader outmigration<\/a> from Illinois.<\/p>\n Conclusion<\/b><\/p>\n This plan would extract even more from some of the most heavily taxed residents in America, while failing<\/a> to address the RTA\u2019s deeper issues.<\/p>\n The RTA\u2019s spending remains high, while ridership remains stagnant at just 70% of pre-pandemic levels. True fiscal stability requires reform, not just more revenue.<\/p>\n\n