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The Tribune editorialized against the governor’s $7+ billion gross receipts tax today (no link because I’m blogging from my Treo and it’s a pain)…
He evidently thinks his proposal doesn’t go far enough to punish Illinois employers, or dun all of the Illinois consumers who patronize them, or discourage potential employers from locating here
Back in February, however, Mother Tribune supported a $13 billion GRT as the best possible revenue-generating plan (no link because it’s no longer online)…
A 1 percent tax on gross receipts in Illinois–goods, services, the works–would raise more than $13 billion a year, according to a study for Houlihan’s office by Alma, Wis., consulting firm Program Analysis Inc. Illinois then could repeal the 5 percent state portion of the sales tax, which now gives Springfield $7.5 billion per year, and kill the $2 billion corporate income tax. The state would have revenue for a $3 billion education fund, plus about $500 million that could be directed to other needs or for other tax relief.
It’s a different plan, including much more tax relief and far fewer net dollars, but the impact that the Trib’s $13 billion GRT would have on businesses can’t be denied.
I suspect that the Trib may have flip-flopped after the corporate suite saw the February editorial. Their tortured explanation today for why a tax that’s a bit more than half the size as theirs is no good just doesn’t work for me.
posted by Rich Miller
Wednesday, Apr 4, 07 @ 2:37 pm
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The Trib editorials have a history of not making sense.
How bout the editorial that blamed the Left and Democrats for the bombing in Turkey?
But based on the respect people give the Trib’s elections endorsements, I’m not particularly worried that stupid editorials do much harm to anything but the paper’s reputation.
Comment by Carl Nyberg Wednesday, Apr 4, 07 @ 3:07 pm
Rich,
Their is HUGE difference between the net increase of taxes with the Trib’s Feb. plan and the Gov’s plan.
Trib. Plan
13.0 Bil New Gross Receipts Tax
- 7.5 Bil Eliminate Sales Tax
- 2.0 Bil Eliminate Corp. Income Tax
_________
3.5 Bil Net New Tax
Guv’s Latest Plan
7.6 Bil New Gross Receipts Tax
1.0 Bil New Payroll Tax
-1.0 Bil Property Tax Relief
-1.0 Bil Partial Elimination of Corp. Income Tax (Implementation in 2011)
________
6.6 Bil Net New Tax (After 2011??)
I did not find it that hard to follow their logic. If you carry it out, for the first three years their would be $4.6 bil each year in new taxes, and $3.6 bil after 2011. Over a 5 year period that is $21 bil difference in new taxes between the two plans.
It may be a flip-flop to you, but to me it’s a difference of over $4 bil a year in new taxes.
Comment by True Comparison Wednesday, Apr 4, 07 @ 3:29 pm
Sounds like true comparison’s url may be coming from the tribune company. Just a bit defensive, don’t you think?
What no one mentions in these debates is that by giving people access to health care, everyone’s premiums will go down dramatically. When the uninsured have to seek treatment in emergency rooms, most of those bills go unpaid. That means that everyone else ends of picking up the tab — businesses and individuals alike. If the uninsured get access to health care and no longer have to seek care in the emergency room, annual health care premium increases can be eliminated by as much as 10% or so — and those savings will add up to billions. Now that’s a real tax cut!
Comment by Give me a break, Trib Wednesday, Apr 4, 07 @ 3:41 pm
True Comparison is correct, the Devil is in the details, and when you borrow a hodge-podge of details from different sources as the Governor has (a little GRT here, a little payroll tax there, a bunch of borrowing there, a smidge of lottery leasing), you sometimes end up with Frankenstein.
Comment by Yellow Dog Democrat Wednesday, Apr 4, 07 @ 3:42 pm
Give me a break -
Unless I’m mistaken, Illinois has dramatically reduced the number of uninsured recently, through the expansion of KidCare and FamilyCare. By your logic, please tell me when the rest of us can expect our health insurance premiums to go down.
Thanks for playing — next please.
P.S. If the Governor is serious about reducing systemic health care costs, he doesn’t need to impose an $8.6 billion tax, he just needs to bring health care providers in Illinois into the 21st century by implementing a statewide electronic medical records system. Independent estimates are that EMR could reduce health care costs by as much as 20%, for a much lower cost, by reducing unnecessary medical procedures (many times hospitals will run a test twice rather than wait for results to arrive from a doctor’s office) and eliminating avoidable medical errors like drug interactions.
CAN SOMEONE IN THE GOVERNOR’S OFFICE PLEASE START THINKING OUTSIDE THE BOX?
Comment by Yellow Dog Democrat Wednesday, Apr 4, 07 @ 3:49 pm
Fyi… nation wide uncompensated care accounts for about 3% of health care costs. Even if all care was compensated you would not see premiums move at all. Labor and expansions of care thanks to technology are cost drivers, not uncompensated care.
Also, 85% of the public has insurance. 95% or higher of seniors over 65 are covered. We’re going to spend an awful lot of $ to get at an extra 10% of the population to pick up health care — about of third of which are all ready Medicaid eligible and about a third of which simply don’t want health insurance because their young adults with better things to do with their limited financial resources.
YDD, you offer some sage advice — a little pollyanish on the savings — but nonetheless sage.
Comment by Greg Wednesday, Apr 4, 07 @ 4:18 pm
The Tribune is suffering from changes forced on it from something called, “reality”. For the past five years, they have been losing financially. They bought a bunch of stuff 20 years ago, and now they selling it off to stay afloat.
I just wouldn’t take too much business advice from them, just as I wouldn’t take swim lessons from a brick.
Comment by VanillaMan Wednesday, Apr 4, 07 @ 4:35 pm
I have paid little attention thus far to the GRT, figuring it has little chance for passage. However, if it does, what happens to the sales tax? I have yet to see that mentioned in what little I have read.
Comment by anon Wednesday, Apr 4, 07 @ 5:06 pm
500 people at the rally in Marion. No protesters.
Guess John Bradley and Phelps are gonna have a tougher vote than they thought!
Comment by Mr Brown Wednesday, Apr 4, 07 @ 5:27 pm
YDD -
From what I heard one of the Governor’s health care people say at a meeting a couple weeks ago, there is money in the healthcare plan to create a statewide electronic medical records database. That would include prescription processing, too, it appears. There were a lot of doctors and pharmacists there who were excited about that.
So… it looks like it is getting crowded outside of that box.
Comment by steven Wednesday, Apr 4, 07 @ 5:49 pm
Mr. Brown, if Bradley and Phelps could come up with ONLY 500 people to attend the Marion rally, they are in worse shape than you or I think. There are enough state employees at the Vienna prison, SIU, Marion/Carbondale area that they should have been able to pack the crown with, oh say, at least 550.
Comment by Little Egypt Wednesday, Apr 4, 07 @ 6:10 pm
If the governor was worried about health care and not insurance companies/contributors he would put some money into Dr. education and recruitment. you could buy a lot of health care for that much money.
Looks like we put a big K in the scorebook for the GodRodTax
But remember Rich is still a News God
Comment by GettingJonesed Wednesday, Apr 4, 07 @ 7:38 pm
There are enough state employees at the Vienna prison, SIU, Marion/Carbondale area that they should have been able to pack the crown with, oh say, at least 550.
Little E, those folks dislike the goob somethin’ powerful. Turn out for him? Ah, maybe not.
Comment by Ha! Wednesday, Apr 4, 07 @ 8:19 pm
The proposed grt is another form of hidden taxation on the people of Illinois. For the govenor to say that it only affects businesses is hogwash. Last time I checked, I buy goods and services in Illinois and to think that these costs will not be passed on to the consumers is silly. A more probable outcome is that the tax will be passed on with an additional markup to cover the administrative costs. I’m still pondering the effect on a company that is barely breaking even, then ending up in the red after paying the grt. Or am I mistaken in assuming that all companies arent making obscene profits.
This sure seems to be a painful way to ensure the Guv can say he didnt raise our taxes in the next election. Oh yeah, for the record I dont own a business, I just work here.
Comment by Splatter Wednesday, Apr 4, 07 @ 9:33 pm
2 million still hits a lot of small bizs… whats the number if it was raised to 5 million?
Comment by anon Wednesday, Apr 4, 07 @ 10:09 pm
steven -
From what I understand of the Governor’s “plan”, it’s merely a pilot project, underfunded, and provider participation is not required. That’s certainly a step in the right direction, but it’s not going to achieve any health care savings.
Comment by Yellow Dog Democrat Wednesday, Apr 4, 07 @ 10:14 pm
Are you on the Right Bus? In the right seat?
GRT? To save the State’s Problem’s; Retirement for State Workers. Pilot Project? 10 Million is the federal small business amount. Look at the profits, not the revenue… this would be comforting to Illinois businesses.
Comment by DEMO CRAT Thursday, Apr 5, 07 @ 7:49 am
Here is the link: http://tinyurl.com/34agjw
Comment by So-Called "Austin Mayor" Thursday, Apr 5, 07 @ 7:54 am
Ten years ago when I moved from WI to IL my health insurance premium immediately jumped by $1000 per year. Same company, same plan. Explanation was that IL is a high medical cost state.
One big factor that concerns me is that of sustainability. Much is assumed in expanding all these state sponsored plans in that the state and the nation are going to remain relatively prosperous. But, if you are looking at the big picture, bleak future scenarios abound. Why do we think we can keep building on an unsustainable footing? Sometimes it is best to concentrate on securing your foundation before adding any more weight to the dwelling.
Comment by vole Thursday, Apr 5, 07 @ 7:55 am
Let the fire sale commence! The editorials are veering all over the road because management has one foot out the door and the editorial board won’t be long to follow. Until then Dold, Chapman & co. can pretty much print any crazy thing that comes to mind.
Comment by HappyToaster Thursday, Apr 5, 07 @ 12:28 pm