Despite residents rapidly fleeing Illinois, the state is considering a ‘music tax’ to try to stop the hemorrhaging of its pension funds.

Illinois is looking into a new tax on Internet streaming as well as raising its vehicle registration and gas taxes to almost the highest in the nation.

The state is buckling under a staggering $134 billion in over 650 unfunded pensions, mainly for police and fire departments.

A state bill entitled the Video Service Tax Modernization Act would impose taxes on Internet streaming such as Spotify and Netflix “for the privilege to witness, view, or otherwise enjoy the entertainment.”

The tax is similar to Chicago’s “amusement tax” forced on city residents back in November to watch Netflix and play Playstation games on-line, as previously reported.

“The legality of Chicago’s ‘Netflix tax’ is dubious,” stated IllinoisPolicy.org. “The Liberty Justice Center, the Illinois Policy Institute’s litigation partner, sued the city on behalf of streaming service customers in 2015, after the expansion of the tax to online services went into effect.”

“The Center argued expanding the tax to online services violates the 1998 Internet Tax Freedom Act, a federal law.”

This federal law prohibits states from enacting taxes against electronic commerce, meaning that Illinois’ proposed statewide law could be struck down.

Illinois is also considering hiking its gas and transportation taxes.

“Legislation introduced last week proposes the state’s first gas tax increase since 1990 and could raise an additional $2 billion in revenue each year, the Chicago Tribune reported,” read an article from the AP. “But it also would hike the electric-vehicle fee from $17.50 to $148, and increase truck registration fees by $100.”

“The fees for driver’s licenses would double under the proposal, from $30 to $60, while passenger vehicle registration would increase from $98 to $148.”

Two billion dollars is roughly only 1.5% of the amount needed to fund the state’s pension funds, however.

Additionally, another problem plagues Illinois: all these new taxes are motivating residents to flee the state.

Not only is Illinois within the top five states with the highest tax burdens, it’s also one of the top five states residents are moving out of.

In other words, if Illinois increases taxes, residents will move out, thus shrinking the tax revenues.



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