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The devil is in the details, but the governor claims God’s on his side

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For whatever reason, my syndicated column hasn’t been posted yet this morning at the Southtown’s site, but I sent them an e-mail so you’ll be able to find it here later this morning. [UPDATE: The column has now been posted. Here’s the direct link.] The gist of the piece is that there are aspects of both major tax plans currently on the table that haven’t been discussed much.

First, the governor’s gross receipts tax…

The governor has claimed that his proposal is all about “tax fairness” because “fat cat” corporations are not paying their fair share of income taxes. He’s right about the corporations avoiding taxation, but a family-owned restaurant that sells a little over a million dollars worth of food every year (and there are lots of them) aren’t what you would normally think of as fat cats.

State Sen. James Meeks (D-Chicago) claims Gov. Rod Blagojevich’s chief of staff told him that if the state moved the minimum taxation level from $1 million to $2 million, the government would lose $450 million a year in revenue. Meeks believes that the “real” money from this proposed $6 billion tax hike will come mainly from small to medium sized businesses, not giant multinational corporations, and I’m betting he’s right.

And now, HB/SB 750, more commonly known as the “tax swap”…

Meanwhile, Meeks is supporting House Bill 750, which is almost universally described as a “tax swap.” In the past, similar legislation “swapped” a large income tax increase for large cuts in the property tax. However, almost never mentioned is that this new legislation would extend the state sales tax to all sorts of services.

The Center for Tax and Budget Accountability, which also backs the Meeks bill, estimates that the revenue generated from those new service taxes would come to about $2 billion in the first year.

The idea of taxing services is fiscally sound. The service sector is where the real economic growth is, so the current state income and sales tax revenues aren’t keeping pace with the growth of the economy. But implementing such a broad tax on services has in the past proved politically difficult. Many service-oriented business have close contact with their regular customers, and they’ve been able to use those relationships to pressure state legislatures all over the country to beat back service taxes. Barbers tend to be the most outspoken, and they have extremely loyal customer bases.

In addition to barbers and beauticians, the legislation would tax services and businesses like travel agents, computer repairs, carpet cleaning services, dating services, dry cleaners, storage units, nail and skin care, consumer goods rentals, diet services, private investigation services, bail bonds, photo studios, interior designers, collection agencies, auto repairs, parking lots and garages, towing services, amusement parks, racetracks, bowling alleys, cable TV, golf courses and country clubs, fitness and recreational sports centers, sports teams, performing arts companies, miniature golf, sightseeing tours, limo services, movie theaters and more.

* Meanwhile, Copley takes a look at Gov. Blagojevich using “God” as a legislative ally.

“I’m personally offended by the governor trying to bring God into the debate of fiscal policy and taxation,” Doug Whitley, president and CEO of the Illinois Chamber of Commerce, said Friday. […]

“Is he laying it on too thick? I think so,” state Rep. Lou Lang, D-Skokie, said. “There simply is no way to know his motivation. I’m thinking it’s mostly just rhetoric, as unfortunate as it may be.”

Copley then digs up two unlikely proponents…

Muslim leader Abdul Malik Mujahid, meanwhile, said he would not object if Blagojevich had used blatantly Christian language. “I consider poverty to be a moral issue, and I also consider medical coverage to be a health-justice issue,” said Mujahid, chairman of the Council of Islamic Organizations of Greater Chicago. “People of all faiths are concerned with moral issues.” […]

Illinois atheist Rob Sherman said he has no problem with the governor’s allusions to God because Blagojevich has couched his comments as opinion, not fact. Sherman said Blagojevich’s approach is different from that of Alan Keyes, the 2004 Republican candidate for U.S. Senate who recently contended that Jesus would not vote for Democratic presidential nominee Barack Obama.

Blagojevich is “merely expressing what he believes God wants, rather than saying he’s God’s spokesman,” Sherman said.

* Aaron Chambers looks at the same topic and comes to this conclusion

The feds are investigating his fundraising, contracting and hiring practices. The state’s bills are backed up by $2 billion. Other leading Democrats are lining up at the Capitol against him.

Masses of people are clamoring for significantly more state spending on schools. ComEd and Ameren, the state’s largest electric utilities, are raising their rates exponentially. His apparent ambition to run for president was eclipsed by U.S. Sen. Barack Obama, another liberal Democrat from Illinois.

On Monday, the governor’s taxpayer-paid staff continued a statewide blitz promoting his plan. They issued a news release saying it “could reverse the course of HIV/AIDS in Illinois.”

The devil is in the details, but God is in the message.

Blagojevich may well need him.

* Other budget/tax coverage…

* Tax cap hits Southland businesses hardest

* Blagojevich questions fairness as he pushes new business taxes

* Triple threat hit governor’s tax plan

* Observers say Lt. Gov spat could hurt Blagojevich’s tax plan

* Editorial: Listen to critics of GRT

* Dissention within the Democratic ranks on Governor’s tax plan

* Kane: Critic overstated impact of tax

* Agency head says governor’s plan will make tax system fairer

* Illinois’ health director urges support for Governor’s agenda

posted by Rich Miller
Monday, Mar 26, 07 @ 8:53 am

Comments

  1. RE: Governor’s ever-expanding media blitz — more T.V. (testicular virility) ads!

    Comment by anonymous Monday, Mar 26, 07 @ 9:09 am

  2. >Agency head says governor’s plan will make tax system fairer

    Umm….what do you expect him to say? He is going to get quite the windfall (increased budget, increased staff, increased pay) if the governor’s plan passes.

    Comment by Leroy Monday, Mar 26, 07 @ 9:15 am

  3. How about moving the minimum tax level from 1 million to 2 million and making some cuts in state government to make up for the loss of GRT projected revenues. We hear a lot about business and citizens paying for additinal health and education services but nothing about streamlining state government. Yet a substantial cut in the state management ranks, especially in some of the porkier agencies like DHS, DCFS, CMS and DCEO, would force more accountability on these very poorly run branches of state government and would
    provide fair relief for Illinois’ heavily taxed
    residents.

    And I’m not just talking about Pajamagate. Things have gotten so bad over at DCFS that some legislators are proposing laws which would allow the agency’s inspector general to send its own teams into “failing” DCFS offices to clean them up. Apparently, the legislators don’t trust DCFS’ very well paid (100k and up) and numerous management staff to do this on their own. So why do we need to continue paying so many of them.

    Comment by Cassandra Monday, Mar 26, 07 @ 9:42 am

  4. Are there any stats that show how many corporations qualify as “fat cats” compared to how many local companies do $1M a year in sales? There may be a 1,000-2,000 really big players, but what about the 500,000 smaller, local places that do $1M+ a year. They dwarf the big guys in employees and volume. They are the ones that GRT will whack.

    Comment by zatoichi Monday, Mar 26, 07 @ 11:17 am

  5. With this morning’s announcement, it seems that Thelma and Louise are driving that TBird off that cliff!

    I just don’t get it. How much do you want to bet that Thelma and Louise are wearing golden parachutes?

    No. I just don’t get it. Even politically, I don’t see where the angle is to score points for them. This is the first year of a four year term. We have another year before the next General Assembly elections. What good is going Kamakaze at this time?

    When they go down, just make sure they can’t unbuckle their seat belts to leap out of the car and open those parachutes - OK?

    Comment by VanillaMan Monday, Mar 26, 07 @ 11:55 am

  6. Thank heavens for our Governor!

    Why can’t everyone see that Rod is sticking his neck out to do God’s will and set up the kingdom here on earth? We need to stop bickering and appreciate what he is doing for us, even if we think we oppose it right now.

    We will all come around later and be thankful. Every knee shall bow.

    It will happen, the Kingdom. Our Governor wants to make sure Illinois is in at the start. We will be one of the sheeps nations, not the goats. All the other goat states and countries will be told “depart from me”, but not Illinois. Then we’ll be ready for the second coming.

    First it started with Alderwoman Tillman’s slavery confession bill. Then her raparations bill. Now our Governor will finish the kingdom with healthcare, education and an increase in minimum wage and state jobs. And then guns.

    He will trample out the love of mammon, which you cannot serve.

    You’d better join him now before it’s too late.

    Comment by Bill, of Goods Monday, Mar 26, 07 @ 12:05 pm

  7. Anyone who claims divine justification for a public policy goal makes me very leery. My assumption is automatically going to be that you can’t othertwise justify the goal, so therefore, let’s get the holy army on our side. What a joke you have become Rod.

    While I am at it, that quote from Mike Jacobs in the link on the Lite Guv spat is a joke too. Did Jacobs actually say that Quinn was out of line because he has to remember whose lt. governor he is. Last I checked Mike, he was the Lite Guv for the citizens of IL. But then again, guess I couldn’t expect much better from someone who has their position only because of who they are related to. You’ve met the Stroger standard with your comment, Mike! Guess this post is coming off a little more bitter than I normally am. Must have woken up on the wrong side of the bed.

    Comment by Niles Township Monday, Mar 26, 07 @ 12:06 pm

  8. Of course the majority the revenue is going to come from small to medium sized businesses they make up the majority of the business in the state. For that matter a business with 2 million dollars in revenue isnt all that large. I am sure Governor thinks that it is a lot easier to sell it to the public if he paints it as going after “fat cats” that aren’t paying there share. As opposed to what it really is, taxing everyone more.

    Comment by RMW Stanford Monday, Mar 26, 07 @ 12:29 pm

  9. Bill of Goods,
    Are you kidding me?

    Comment by Utility Infielder Monday, Mar 26, 07 @ 12:38 pm

  10. Yes, UI, he’s joking.

    Comment by Rich Miller Monday, Mar 26, 07 @ 12:45 pm

  11. In Indiana they knuckled down and passed a circuit breaker property tax bill. Tax take can not exceed 2% of estimated market value of residential property. They will do annual reassessments.

    Belt tightening galore.

    Comment by Truthful James Monday, Mar 26, 07 @ 2:20 pm

  12. The U.S. Conference of Catholic Bishops said health care is a basic human right. Joseph Cardinal Bernardin called it a “moral imperative.”
    The Cardinal said health care reform is a political and moral test. And Cardinal Bernardin said:”..those segments of our economic order, which have been able to avoid an appropriate level of responsibility for the health care of their employees must begin to assume their fair share…” “For many it is literally a matter of life and death, of lives cut short and dignity denied.” Does any believerdoubt God was on Cardinal Bernardin’s side? And Rich you reported the IPA offically opposed the GRT and will encourage member newspapers to publish stories on the local community impact. Note…they didn’t say editorials..they said stories. As a former journalist whatever happened to honest, fair, accurate, objective reporting? Will education and health needs be treated fairly in stories opposing the GRT? Maybe you should ask the IPA. Thanks

    Comment by Dick Kay Monday, Mar 26, 07 @ 6:33 pm

  13. Hi Dick,
    Welcome to the team! watch out for Bill, of goods. He has God’s ear.

    Comment by Bill Monday, Mar 26, 07 @ 7:01 pm

  14. There are some of us, practicing Catholics who believe the U.S. Conference of Catholic Bishops is less concerned with faith and morals than with finding a new constituency.

    They papered over the as yet simmering child molestation scandal and essentially admitted only the indicted ones and the old queens that were fully retired or dead. In the meantime the senior people like the inaptly named Cardinal Law was treated to no criticism by the U.S. Conference of Catholic Bishops and sent to a sinecure in the Curia,

    Was God on his side?

    And then we have the illegal alien problem.

    Locally, the Church closes Catholic schools on the pretext that not enough Catholics attend, throwing notivated studennts back into the maw of the public school system. It closes parishes because it can not compete with the Protestant storefronts. Up in Waukegan they encourage illegal aliens, instead of sending priests to Mexico to better conditions there.

    They have set catholicism back generations.

    So, don’t pontificate, Mr. Kay. You are a paid flack now, not a commentator.

    I know of no large employer which does not provide a health plan for its workers. I know of no hospital which turns away emergency matters.

    Interestingly, much hospital expense is related to abortions. What, sir, did the Cardinal say about that? It is part of ‘health care’.

    Was God on the side of Cardinal Bernardin? Only God knows. And you, sir do not.

    Comment by Truthful James Monday, Mar 26, 07 @ 7:23 pm

  15. Bill,

    Have you been drinking Kool-aid?

    Comment by So Blue Democrat Monday, Mar 26, 07 @ 7:51 pm

  16. Well, “Truthful James,” I have to agree with you. I call myself a practicing Catholic only because I, like everyone else, will have to keep “practicing” the faith until I get it right, or until I die, whichever occurs first. In light of that, it seems awfully presumptuous for anyone to claim God is on the side of a particular political program, no matter how well intentioned. Standing up for moral principles like defending life, curing the sick or helping the poor is one thing; insisting that such principles are served only by a particular policy or program is another matter entirely.
    Didn’t Abraham Lincoln say something about being more concerned with being on God’s side than with God being on his side? I don’t recall the exact quote… does anyone else?

    Comment by 'Lainer Monday, Mar 26, 07 @ 9:01 pm

  17. Hello So Blue,
    Yes. I have. I hope that you are doing well.

    Comment by Bill Monday, Mar 26, 07 @ 9:12 pm

  18. To the former “journalist.” As to “honest, fair, accurate, objective reporting,” look in the mirror and admit it’s a myth. As a flack for the Governor you’re in a “pot calling the kettle black” position here. There was nothing “fair, honest, accurate and objective” about the television propaganda put forth by the Governor to promote his GRT and health care plan. There was nothing “fair, honest, accurate and objective” about the sudden flood of letters to “small businesses” at the taxpayers’ expense trumpeting the GRT.

    Discussion of the appropriate role of government in the provision of health care is an appropriate subject for debate. However, to suggest, or even imply, that a failure to embrace the Governor’s ill-conceived plans to expand health care coverage is morally wrong is reprehensible.

    Comment by Just the Facts Monday, Mar 26, 07 @ 9:18 pm

  19. Failure to embrace the governor’s plans to expand health care is morally wrong. Taking a jab at ol’ Dick Kay is ageist!

    Comment by Bill Monday, Mar 26, 07 @ 9:22 pm

  20. Dick, I’ll be monitoring the stories ginned up by the IPA. Take it as it comes.

    Comment by Rich Miller Monday, Mar 26, 07 @ 9:26 pm

  21. Rich,
    Its kinda late to be working on your birthday. Why are you still coherent?

    Comment by Bill Monday, Mar 26, 07 @ 9:31 pm

  22. …and how does the big five-o feel?

    Comment by Bill Monday, Mar 26, 07 @ 9:33 pm

  23. Bill, one thing is certain, you will ALWAYS be older than me. And balder. lol

    Comment by Rich Miller Monday, Mar 26, 07 @ 11:03 pm

  24. It seems that religion, just like many other issues, is simply a tool for this governor - rather than a lifestyle. He has no church life and makes a paltry 1% charitable contributions from his $300,000 yearly income. Is this behavior indicative of a religious man?

    Comment by In the Sticks Tuesday, Mar 27, 07 @ 12:20 am

  25. It is blatantly obvious that the GRT is designed to tax the small businesses. Unfortunately, the general public is too ignorant to understand the obvious, so it works well to say you are going after the “fat cats”. If you want to exempt small business, please use the guidelines made by the State of Illinois to define a “small business”. Such as wholesalers who make less than $10M are considered small business and can claim that when selling to the State of Illinois.

    I did a quick example. Say a company’s revenue is $1M, net profit before taxes is 1% or $10K. With the 3% tax rate you owe Bozo $300, with Bozo’s GRT you would owe $5K. Over 1600 percent increase. If you wanted to offset the GRT you would either raise your revenues 95%, cut expenses or both. And you thought electric rate increase was a lot.

    Draw line following where 51/39 crosses the Wisconsin border South to I-80 and then I-80 East to the Indiana border. Kick all the politicians that come from this NorthEast corner out of Springfield (as if they actually live in Springfield) and let them have the new State Chicagoland. In 5 years, let’s see who has a better economy.

    Comment by Division Commander Tuesday, Mar 27, 07 @ 10:13 am

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