This past week, Senate Democrats called for a $11.5 billion dollar tax increase to help balance the budget. The Republican legislative delegation will hold strong against any new taxes or tax increases. Every Republican member, save one, has publicly taken the "No New Taxes Pledge;" it would be political suicide for a Republican member to break their promise on taxes.
However, taxpayers should be very afraid of the inevitable game of tax semantics, especially over a sales tax on services. The pro-tax lobby is already trying to frame the issue as "tax fairness" and "modernizing the tax code." A wide application of the sales tax to services could mean up to $45 billion in new taxes! That huge number gives the pro-tax lobby a wide variety of services to tax.
Make no mistake about it; applying the sales tax to services is a tax increase. Moreover, it means a double tax for businesses that already pay one of the nation’s highest income tax rates. Small businesses need to make it clear to Republican members that any expansion of the sales tax is a tax increase.