Quote:
Originally Posted by SamInTheLoop
Oh lord. Well I guess the good news is that the bill in its current form is pretty much DOA (the House won't buy it). The question is: how much does it get amended? Hopefully a lot. It's funny - a couple years ago he made the news by implying that his (I think this is what he said) father-in-law (Ald. Dick Mell) had a lack of "testicular fortitude" (whatever exactly that is). Whatever the precise definition is, it is clear with his lame tax plan that he has none of it. Also, anyone with the most basic understanding of economics knows that in the end it is consumer taxpayers that pay just about all tax anyway (businesses are for the most part just tax collectors), as tax is passed on to the taxpaying consumer public in the form of higher prices, lower demand for goods and services, etc...
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I sure hope so.
Gov needs new idea, and he needs it now
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http://www.suntimes.com/news/comment...its04a.article)
April 4, 2007
There's a reason why Gov. Blagojevich is barnstorming the state trying to drum up public support for his proposed new gross receipts tax on business. It's because his idea is going nowhere in Springfield. It's not just that Republicans and business groups are raising a ruckus. Blagojevich can't even get key Democrats on board -- Mayor Daley, Lt. Gov. Pat Quinn, Comptroller Dan Hynes and the Rev. Jesse Jackson are among those who have argued it's the wrong approach. While its broad base and low rates have appeal, they don't overcome the defects of the gross receipts tax. It's time to find Plan B.
Blagojevich wants to tax all the money a business takes in, not just its profits. Small businesses with less than $2 million in receipts would be exempt, and manufacturers would be taxed at a lower rate than service businesses. Companies subject to the new tax would no longer pay the corporate income tax. The plan would raise $7.6 billion to cover some necessary expenses, such as school funding and property tax relief, and one proposal we think should wait until the state's finances are in better shape: universal health insurance.
The governor says too many companies can now avoid paying any corporate tax because of legal loopholes.
Businesses say that will be devastating. They say the costs will be passed on to consumers, meaning "working families" will end up paying the tax. And businesses argue that they do pay their fair share, when you consider that business taxes account for about half of all state and local taxes collected each year.
Blagojevich is so far taking a hard line, refusing to break his promise to not raise income taxes or sales taxes. But he's already acknowledged the need for new revenue, something he didn't do during his campaign last year. Without the gross receipts tax, he must find other revenue sources. He and the Legislature have a variety of choices. They could and should make a more serious effort to identify loopholes that are being abused. They could explore the idea of extending the sales tax to services. They could consider a graduated income tax. They could revive the idea of a "tax swap" -- raising the income tax and lowering property taxes. But doing nothing, and letting the state's finances further deteriorate, is not an option.
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