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This has been mentioned before in at least one other place I think, but Crain’s fleshed it out a bit more last night. On top of the gross receipts tax, Gov. Blagojevich also wants to impose a payroll tax on business to help finance his universal health care plan.
Illinois business would face a second major new levy — a payroll tax of about 3% — under the proposed fiscal 2008 state budget that Gov. Rod Blagojevich is scheduled to unveil Wednesday.
A spokeswoman for the governor confirmed Friday that “a tax based on some portion of payroll†of most companies that do not now offer health insurance to their workers will be included in the new budget proposal.
Proceeds would be used to subsidize a new universal health care system that Gov. Blagojevich is expected to roll out as early as this weekend.
As previously reported, Mr. Blagojevich also is expected to propose a new tax on gross corporate receipts that would net as much as $6 billion for health care, schools and other needs and which would replace the state’s existing corporate income tax. […]
Sources familiar with the governor’s plan say the new payroll tax would technically be levied on all companies, but companies would receive full, dollar-for-dollar credit for expenditures they already make for worker health insurance. Also exempt would be companies with 10 or fewer employees each, insiders say.
* Meanwhile, also in Crain’s, another tax is being proposed
The Senate’s point man on electric rates is floating the idea of a tax on Illinois power generators to produce revenue for rebates to utility customers reeling from higher electric rates.
Sen. James F. Clayborne Jr., D-Belleville, a close ally of Senate President Emil Jones, has asked power plant owners including Exelon Corp., Ameren Corp., Midwest Generation LLC and Dynegy Inc. to meet with him Wednesday to discuss a tax or revenue-raising alternatives they could offer. […]
The development is seen in Springfield as evidence that Sen. Jones, a staunch backer to date of Commonwealth Edison Co. in its opposition to reducing or rolling back the rate hikes, won’t support the utility unconditionally in the face of customer outrage over the increases. Springfield erupted last week as Downstate consumers told their stories of electric-bill increases in some cases exceeding 200% and 300% during an unusual hearing before the full House. […]
“The (tax) mechanisms that are being talked about are an elegant solution to the problem,†says David Kolata, executive director of the Citizens Utility Board, a consumer watchdog group. “What’s happened (with the rate hikes) has been a tremendous transfer of wealth from consumers to Exelon, Ameren and Wall Street.â€
*** UPDATE *** The Tribune mentions the payroll tax in a Monday story. This is, at the moment, the most underreported story of the upcoming budget fight.
Sources have said that in addition to the $6 billion tax on business gross receipts, which would require businesses to pay the state each time they got paid for a product or service, the governor intends to propose a new payroll tax to generate money from businesses that do not provide health insurance to their employees.
The governor is expected to detail both taxes Wednesday during his budget address to the General Assembly. The governor’s administration has been promoting the speech, going so far as to send out e-mails to an array of Illinois groups and residents encouraging them to gather to watch it. The e-mails ask recipients to RSVP to 15 pre-selected locales around the state where his budget address will be aired and where staffers from his office will be on hand to answer questions.
posted by Rich Miller
Saturday, Mar 3, 07 @ 3:32 pm
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I like everything that I have heard. Of course, the opponents will throw all this propoganda out there but this gross reciepts tax has been very successful in other state. Why shouldnt large corporations, lawyers, and businesses that dont provide health insurance for their employees pay taxes?
Its plain and simple. Rich people and huge corporations have so many tax breaks and loop holes they pay much less in taxes than the low to above average income portion. Its time they do their share.
Comment by Mr Brown Saturday, Mar 3, 07 @ 4:05 pm
Can a state exist when every single business has been forced to relocate because of an idiot governor? This guy is not a democrat, at best he is a socialist, but I am starting to think he and Stalin might have gotten along well. of course he will have to throw a few more people under the bus to catch up…
Comment by leigh Sunday, Mar 4, 07 @ 11:34 am
So blogo is proposing a gross sales tax on companies in Illinois. So if I buy an item that was made in Illinois, the raw materials have been taxed at each step of manufacture. So do I have to pay sales tax. It sounds like double taxing to me.
These tax schemes seem so anti-business. What company is going to want to stay in Illinois? Gross receipts tax, pay roll tax for universal health care are going to dive businesses away. Does this mean that when companies are being lured to set up shop in illinois, that these will be bargaining chips?
Comment by Huh? Sunday, Mar 4, 07 @ 1:15 pm
Well so much for the Governors pledge not to raise taxes, it almost seems he is purposely trying to make Illinois’ economic climate uncompetitive.
Comment by RMW Stanford Sunday, Mar 4, 07 @ 10:15 pm
“I like everything that I have heard. Of course, the opponents will throw all this propoganda out there but this gross reciepts tax has been very successful in other state. Why shouldnt large corporations, lawyers, and businesses that dont provide health insurance for their employees pay taxes?”
What makes you think that just the big bad greedy business are going to be the only one paying for it? By its nature the cost of most of the GRT will become embedded in the prices of goods and services, so in the end the consumer will end up paying most of the cost of the tax. Those in the low income groups will end up baring the cost the worse, since they spend pretty much everything they earn on goods and services and will be effected the most by the higher prices. Along with that people will suffer as the tax will hurt economic growth and drive businesses out of the state.
Comment by RMW Stanford Monday, Mar 5, 07 @ 12:52 pm
Mr Brown -
Please read RMW Stanford’s second post. He explains it real simple for all to read. The consumer will pay the the price of the tax because it will be passed on to them. Plain and simple. It is the same as the consumer paying for the added cost of a product due to higher raw material costs.
Why doesn’t Blago tax the crud out of businesses that outsource labor overseas? It would seem to me that corporations are killing our workforce by hiring dirt cheap labor elsewhere thus avoiding taxes of all sorts here in the US.
Comment by Papa Legba Monday, Mar 5, 07 @ 1:26 pm
another Blago lie NO NEW TAXES. everything in ILL cost more than are neighboring states thank god I can go to Indiana for everything it is very cost efficient. Remember Blago when businesses leave Ill or refuse to come here everyone will be on your state welfare but there will be no one to pay
Comment by Fed up Monday, Mar 5, 07 @ 3:00 pm
Maybe the guv is trying to make us more like Canada, so we can eventually become another province and participate in their healthcare and meds programs
Comment by Concerned Voter Monday, Mar 5, 07 @ 5:51 pm