My syndicated newspaper column takes a look at how the lobbying is shaping up against the governor’s still rumored but most likely a reality “gross receipts tax.” Business ain’t happy.
You probably can imagine the size, intensity and ferocity of the lobbying effort if the state’s largest corporations and its most powerful law firms and medical practices teamed up to fight this tax. A trial lawyer who earned hundreds of thousands of dollars in fees by winning a case would have to pay gross receipts taxes on all of that, even if the lawyer spent a fortune to move the case along over several years. Medical practices that invested a significant portion of their profits in new equipment or technology would receive no deductions. Giant corporations, which can move headquarters and plants at the drop of a hat, would see their tax bills rise in a big way.
Combine that with large businesses that traditionally operate at extremely low profit margins or whose razor-thin margins are tied to unpredictable commodity prices (like supermarkets, airlines and farmers), add in giant publishing companies with ever-growing fixed costs and declining ad sales (like the Tribune Co.), toss in companies that regularly invest large amounts of their annual revenues into infrastructure and technology (like utilities and hospitals), and that’s pretty much everybody with a lobbyist in Springfield.
Small businesses might be exempted from the tax, according to a State Journal-Register columnist, who reported about a poll several weeks ago that asked people about the gross receipts tax. The columnist claimed the poll mentioned that the tax might exempt the first million dollars of corporate revenue.
Exempting the smallest of businesses probably won’t lessen the Statehouse lobbying effort because the groups that work on their behalf in Springfield also have plenty of big business members. The Retail Merchants Association represents the mom and pop stores on Main Street as well as the big chains like Wal-Mart. The Press Association advocates for tiny newspapers in small towns all over Illinois along with the Tribune. The same goes for the Illinois State Chamber of Commerce, the Illinois Pharmacists Association and pretty much every other business group you can name.
There’s more about the push, including some of the governor’s tactics. Read the whole thing and discuss.
* On the other hand, Chicagoist thinks the gross receipts tax idea looks more likely than anything elseâ€¦
Blagojevich quietly moved his combined State of the State and budget proposal address to March 7. And yesterday the Illinois Board of Education released itâ€™s Fiscal Year 2008 budget (you can read the PDF here), and is asking for an additional $800 million over this yearâ€™s budget. You can bet that they wouldnâ€™t be asking for that kind of increase without getting the blessing from the governorâ€™s office first.
G-Rod must feel pretty confident that he will get his new tax plan this session, and be able to beat back the aforementioned power-brokers, without appearing to raise taxes on â€œregular peopleâ€ and finding even more money for school children.
We donâ€™t think that selling the lottery is going to happen; that idea will be dead in the water before it even hits the Statehouse. And weâ€™re pretty sure Blago knows this. With so many power hitters lined up for reform, and the monetary pressure building, it may be easier to try to stick the tax bill to businesses than to institute real tax equity in Illinois. At least for now.