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* This press release was issued yesterday by Rev. Jesse Jackson…
Rev. Jackson, black and Latino business leaders respond to Gov. Blagojevich’s gross receipts tax plan
WHO: Rev. Jesse L. Jackson Sr., founder and president of the Rainbow PUSH Coalition, members of the Rainbow PUSH International Trade Bureau, as well as members of the Alliance of Business Leaders and Entrepreneurs (ABLE)
WHAT: Press conference
WHERE: Rainbow PUSH Coalition Headquarters
930 East 50th Street
Chicago, IL 60615WHEN: 12 noon on Friday, April 6, 2007
WHY: Rev. Jackson and business leaders will respond to Gov. Rod Blagojevich’s gross receipts tax plan which will create a hardship for small business owners, of particular concern since many of the state’s small business owners are minorities.
Blagojevich and Jackson had a bit of a dustup earlier this week. Jackson privately pledged his support for the GRT and then flip-flopped (according to the governor), leading Gov. Blagojevich to claim that Jackson was listening to his “contributors.”
I’ll update this later if I get a report from the presser.
* The business groups opposed to the GRT have a new radio ad. Click to listen…
* And this makes no sense at all…
Champaign County Chamber of Commerce President Laura Weis heard Gov. Rod Blagojevich was in town Thursday, but she didn’t get a chance to challenge him in person about his gross receipts tax plan that is so reviled by Illinois businesses.
“I wasn’t invited,” Weis said after Blagojevich sandwiched an unplanned visit to Christie Clinic in Champaign late Thursday afternoon between planned bus tour stops in Decatur and Danville.
Weis said the governor’s office had attempted to line up Champaign County businesses to meet with him when the bus tour was being planned, but there weren’t any takers.
If Weis knew that Blagojevich was trying to line up a meeting, why didn’t she take him up on it? And then she whines that she didn’t get a chance to challenge him in person? I don’t get it.
[Hat tip: IlliniPundit]
* The Illinois Press Association continues its crusade against the GRT. Earlier this week, the IPA set up a teleconference for reporters throughout the state that featured the Illinois Chamber’s Doug Whitley and Tom Johnson of the Taxpayers’ Federation…
“Make no mistake about it, it’s a huge tax increase, and it’s all about increasing state spending by a magnitude we’ve never seen,” Whitley said.
Whitley and Johnson argued that the tax will have a pyramid effect, will be unfair toward companies with smaller profit margins and will represent an unconstitutional tax on the press.
“All employers will feel the effect of a gross receipts tax,” Whitley said.
Not a single counter-argument was included in the article.
* The Southern Illinoisan also reported on the IPA teleconference, without ever mentioning that the Illinois Press Association sponsored the program.
The story also included a critical sidebar that was lifted directly from the Center for Tax and Budget Accountability, but the paper never mentioned that the CTBA is proposing an alternative tax hike and is on record opposing the GRT.
* And the owner of the Hancock-Henderson Quill included this comment from an IPA official this week about the publisher group’s opposition to the gross receipts tax…
“We are making this our top priority.”
* One of the best speakers during the governor’s bus tour this week was Rockford small business owner Duntai Mathews. The tour stopped at his small manufacturing plant. Nobody expected him to do as well as he did, but, like I said he was one of the main highlights of the entire trip…
*** UPDATE *** According to a friend who was there, Jackson said Blagojevich budget chief John Filan agreed to consider some things that Jackson wanted, including possibly launching a campaign to change the Constitution to allow a graduated income tax.
Jackson reportedly ripped into criticized (but not as harshly as expected) the GRT, claiming it would put black companies like WVON radio out of business. He stayed away from any personal jabs at the guv, however.
*** UPDATE 2 *** From the AP…
Reverend Jesse Jackson says Governor Rod Blagojevich’s proposed new business tax will put small companies out of business.
Jackson said at a news conference with business leaders today that he wants to work with the Blagojevich administration to devise a better way to come up with money to fund the governor’s education and health care programs and offer property tax relief.
The civil rights leader says he can’t support the governor’s “gross receipts tax” plan in its current form.
*** UPDATE 3 *** Check out this graphic at the very top of the Illinois Press Association’s home page. Talk about going all-out. Click to see actual size…
*** UPDATE 4 *** From Crain’s…
The Rev. Jesse Jackson Friday renewed his attack on Gov. Rod Blagojevich’s proposed $7.6 billion tax on corporate gross receipts and said the governor has agreed to consider changes in the plan.
But the governor’s office immediately shot down any hint of a compromise, promising only to “continue to listen to everyone’s ideas and concerns.â€
Mr. Jackson’s comments came at a midday press conference at which the civil-rights leader charged that numerous emerging small businesses, many of them owned by African-Americans, would go bankrupt if lawmakers approve the governor’s proposal for a flat tax of 0.85% on manufacturers and 1.95% on service providers.
“With a flat tax, small business will be flattened,†Mr. Jackson declared to nods from about a dozen black business leaders who also attended the pres conferences. “What looks even is not even. The flat tax eliminates a significant body of small businesses.â€
posted by Rich Miller
Friday, Apr 6, 07 @ 12:16 pm
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Let’s be fair to Jackson: Gov. Blagojevich is the only one who says that Jackson endorsed the GRT, and I would take that as Gospel. Jackson said he expressed sympathy with the Governor for the fact that so many Illinois businesses don’t pay taxes. That’s much, much different than endorsing an $8.5 billion tax increase that will directly impact one in six businesses through GRT and every company with ten or more employees on payroll taxes.
Let’s also remember that long before Rev. Jackson announced his opposition, Cheryl Jackson, the Governor’s former press secretary and the current head of the Chicago Urban League, expressed the exact same concerns. Is the Governor claiming that his former press secretary is bought and paid for as well?
Comment by Yellow Dog Democrat Friday, Apr 6, 07 @ 12:30 pm
Meant to say “I would NOT take that as Gospel.”
In the battle of Rod Blagojevich v. The World, somebody’s got to defend The World.
Comment by Yellow Dog Democrat Friday, Apr 6, 07 @ 12:32 pm
So, YDD, you don’t think that corporations will pass along to consumers the cost of the income tax increase that you support? And consumer buying power won’t be hurt by the increase in their own personal state income tax?
Comment by Rich Miller Friday, Apr 6, 07 @ 12:48 pm
… Not to mention the new sales tax on services.
Comment by Rich Miller Friday, Apr 6, 07 @ 12:58 pm
So - the Governor takes the GRT seriously?
Someone forgot to ask for support from Daley, Quinn, Giannoulais, Madigan, Jackson, Jackson Jr, Hynes, and most anyone outside Mr. Blagojevich’s circle before he showed up last month and dropped his GRT proposal in his Annual Budget Address.
He got all the campaigning right, but he forgot what it means to find support on major budget policies BEFORE he opens his mouth publically.
How long has he been governor? How he has handled the GRT doesn’t make him look like he has done any real work since cutting that TV ad criticizing his opponents - before he knew who his opponents would be.
Anyone want to give this guy a hand and show him how to be a governor?
Comment by VanillaMan Friday, Apr 6, 07 @ 1:04 pm
Well, the sales tax on services would at least be transparent and rational. Corporations might pass on the cost of their taxes, but that’s true regardless. At least the good ol’ corporate income tax is on companies that at least turn a profit. Clamp down on the scofflaws if you like, but don’t use the GRT to draw blood from stones.
Comment by Just Saying Friday, Apr 6, 07 @ 1:18 pm
Will this Gross Revnue Tax affect fees from lawyers and doctors?
Comment by Official "A" Friday, Apr 6, 07 @ 1:29 pm
It’s time to start a Death Watch: put some $$ into a pool to bet on the date that the GRT is declared dead in the General Assembly. My bet is May 11.
Comment by Decatur Dave Friday, Apr 6, 07 @ 1:38 pm
Looks like the Governor’s legal fees will increase if this GRT is passed. But what does he care it’s not his money. It’s good to be King.
Comment by FlowerChild Friday, Apr 6, 07 @ 1:54 pm
When the government wants to increase taxes by this much, it is going to hurt everyone! Maybe some more than others, but it will hurt everyone. It is nearly a 30% increase in general revenue spending!
Comment by True Comparison Friday, Apr 6, 07 @ 2:05 pm
Decatur Dave, MY understanding is that the Democrats will call for a vote before the end of April if they think that they have enought votes to win.
Comment by nomoretax Friday, Apr 6, 07 @ 2:14 pm
My understanding is the Senator Michael Ferichs from champaign will be a key vote and that he has not stated his position on the GRT. Please email or phone him to express your opposition to the GRT
Comment by nomoretax Friday, Apr 6, 07 @ 2:18 pm
“nomoretax” let’s not spread rumors like that. Right now, they have nowhere close to the number of votes they need in the Senate. People were all abuzz last week that they were gonna run the bill but that was absolutely false, partly because they didn’t even HAVE a bill.
Comment by Rich Miller Friday, Apr 6, 07 @ 2:21 pm
Mr Miller, I am not spreading rumors. I was told this by a state senator today in a telephone conversation.
Comment by nomoretax Friday, Apr 6, 07 @ 2:38 pm
They’ll run the bill when they have the votes, I’m fairly sure. But they don’t have the votes right now. Not even close.
Comment by Rich Miller Friday, Apr 6, 07 @ 2:44 pm
At just which local “pub” Al Capone hung at in the Q ? Did you find it ? Did people people “boo” you once at said PUB ?
Comment by Confused Friday, Apr 6, 07 @ 2:51 pm
nomoretax,
I believe if you do some research that you’ll discover that Sen. Frerichs has been in favor of a Tax Swap, not that he can’t change his mind. He is the chief sponsor of SB508:
Synopsis As Introduced
Amends the State Finance Act. Creates the School District Property Tax Relief Fund. Requires appropriations from the Education Assistance Fund. Requires the Department of Revenue to certify property tax relief grants for school districts from the Fund. Sets forth procedures for these grants. Creates the Higher Education Operating Assistance Fund for the purpose of grants to colleges and universities. Requires annual appropriations to the Fund. Sets forth requirements for appropriating and using moneys from the Fund. Amends the Illinois Income Tax Act. Increases the rate of income tax for individuals, trusts, and estates from 3% to 5% and for corporations from 4.8% to 8%. Requires this additional revenue to be deposited into the Education Assistance Fund. Increases the amount of the earned income tax credit and the education expense credit. Limits the amount of the property tax credit to $30. Amends the Property Tax Code. Requires abatements of education extensions by the amount of the property tax relief grants received. Amends the School Code. Increases the foundation level of support and grant amount for supplemental general State aid. Changes the distribution of moneys from the Education Assistance Fund. Establishes the Education Assistance Fund Board to make biennial recommendations concerning appropriations from the Education Assistance Fund. Creates a continuing appropriation. Makes other changes. Effective immediately.
Comment by True Comparison Friday, Apr 6, 07 @ 3:02 pm
Seriously, what kind of governor drops a bomb of a $6-8 billion tax increase and expect folks to roll over and take it in the short pants? He’s either the king of fools or this is a stalking horse for his payroll tax or expanded sales tax on services.
Comment by Slice & Dice Friday, Apr 6, 07 @ 3:20 pm
My main objection to 750 in its current form is that despite a tremendous tax increase it does not address the health care crisis or the pension debt. It does move toward a more equitable way to fund education. It does not address the loopholes in the corporate tax. It re-alocates burden from some property owners to all consumers of services. It has been argued that increasing sales taxes and income taxes is more regressive than than the GRT. I have supported the swap idea since the 1980’s but only because it always seemed to be the only way an income tax increase could pass.
With the GRT, we now have a new idea on how to fund state services. The Governor’s new commitment of $1 billion to property tax relief, again, would make it less distasteful for legislators to vote for.
Which is the most regressive? Which is the least fair? I don’t know. I do know that the Gov’s plan produces much more revenue, addresses health care and pensions and capitol spending.
I’ll be happy with either plan but more happy with the GRT. Some combination of the two concepts could and, I predict, probably will pass. Jackson’s concerns about smaller businesses could easily be mitigated by raising the exemption to 5-10 million in gross reciepts. The governor has shown willingness to listen and change his plan as evidenced by changes he has agreed to in his original proposal. I have faith that the governor and the leaders will get something done. We have a long way to go. I think it is healthy that the constitutional officers are weighing in. Their input will be crucial in crafting a compromise plan that everybody can live with. Until there is some movement by 750 supporters, however, compromise will be stalled.
Comment by Bill Friday, Apr 6, 07 @ 3:25 pm
Bill, the GRT doesn’t address the pension problems either. That’s why Blagojevich wants to sell/lease the lottery.
How about this: Modest tax swap plan, sell the lottery, expand gambling for capital construction and use a GRT with a high starting point of, say $100 million, to really hit the big corps.
Comment by Frank Booth Friday, Apr 6, 07 @ 3:31 pm
Bill, what percentage will the 1 billion dollar property tax relief mean for the average tax bill? 4% I am guessing that really is not much of a comprise in my eyes.
Comment by nomoretax Friday, Apr 6, 07 @ 3:35 pm
Frank,
That sounds good to me and is probably what we will end up with in the end. $100 Million sounds a little too high though.
Comment by Bill Friday, Apr 6, 07 @ 3:36 pm
Nomore,
It is probably not that much less than the 30% of property tax dedicated to education spending and it would all depend on how the “relief” was allocated. Some sort of cap on assesments would probably offer more relief to property owners…at least in Cook and the collars.
Comment by Bill Friday, Apr 6, 07 @ 3:39 pm
The funding source is still in great debate, but I would hope before ANY tax increase is passed that how it will be spent will be clearly spelled out. The tax payers who are going to be hit deserve of memorandum of understanding from their gov. and legislatures as to exactly how the money will be spent.
Comment by leigh Friday, Apr 6, 07 @ 4:21 pm
leigh-
You never see any type of memorandum of understanding from our governor or the legislatures. The governor is seeing $$$$$ signs in a big way. And HotRod will spent our money like a drunken sailor.
Comment by UpperCrust Friday, Apr 6, 07 @ 4:34 pm
Bill,
Instead of the GRT to help fund state services, why doesn’t the Guv try to reign in costs on current spending? I think it’s called balancing a budget.
Take incoming revenue then spend no more than what is taken in. It has worked for quite a few people, companies and governments.
He could fix the state government instead of proposing campaign style, feel good fantasy programs for which he needs to trade state funds for legislative votes.
In other words, he needs to govern, be a manager. Not a campaigner trying to get everybody to think he is their saviour.
Bottom line. Blago will look like a horses a$$ by the time the spring session ends.
Comment by Papa Legba Friday, Apr 6, 07 @ 4:45 pm
Bill, sometimes you make some sense, and sometimes you make more sense than Blago. Happy Easter to you; and to everyone, don’t forget to thank God for your blessings. I’m very grateful for the family reunion last weekend with Little Little E #1 home from Iraq. It didn’t get any better than to have all the kids/grandkids together, happy, and healthy.
Comment by Little Egypt Friday, Apr 6, 07 @ 5:35 pm
Papa Legba - Blago can’t do anything BUT campaign. That’s all he knows how to do.
Comment by Little Egypt Friday, Apr 6, 07 @ 5:37 pm
Can anyone please remind me, what election it was that the Rev. Jackson was elected by the people, so he can “work with the Blagojevich administration to devise a better way to come up with money to fund the governor’s education and health care programs and offer property tax relief.”?
What scares me though is that Jesse and I are on the same side on this one, “The civil rights leader says he can’t support the governor’s ‘gross receipts tax’ plan in its current form.”
AHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!
Comment by Concerned Voter Friday, Apr 6, 07 @ 5:42 pm
I just received a personal letter from Governor Rod Blagojevich informing me that my small business hasn’t been paying its fair share of taxes and that the individuals of Illinois have paid the price. And because my business is growing and has surpassed the one million dollar in sales mark, the Governor now considers it a large multi-national corporation. Here are the facts:
In 2006 my company employed 21 people who live in Illinois, the total combined federal taxes paid was $400,000.00. The total combined social security tax paid by the employees was $68,000.00. My company paid the matching $68,000.00 to social security as required by the federal government. A total of $29,000.00 was paid for Medicare taxes. A total of $57,000.00 was paid to the State of Illinois for state taxes, and my company paid 100% of the employees’ healthcare costs for a total of $124,000.00. That’s a grand total of $746,000.00 in taxes and health care benefits paid by my company. This is what Governor Blagojevich considers finding ways to avoid paying a fair share of taxes.
Based on our projected growth, the governor wants to tax my company an additional $90,000.00 per year. That’s $90,000.00 I can’t use to hire more employees. That’s $90,000.00 per year I can’t use to build a new office building to support those employees or the jobs such construction would create. If I don’t build a new office here in Illinois, the benefits will be shifted to some other state.
My company produces software and services for pharmaceutical and biotech companies throughout the world. We do not outsource work to foreign countries. We substantially contribute to the economy of Illinois. Twenty-one employees, all of which must pay mortgages, auto payments, tuition, and more, rely on their jobs my company offers. Sorry Governor, no loopholes, no lobbyists, just a patriotic American trying to achieve the American Dream for himself and his employees. How fair will it be to them when my company moves out of this state? And I promise you Governor, I will move my company out of Illinois if this tax law is passed.
The statements made by Governor Rod Blagojevich about corporations not paying their fair share are absolutely false and misleading. If he continues on his path of demonizing businesses in Illinois, they will leave and few will be coming in. I understand something must be done to help fund Illinois schools and provide affordable healthcare in Illinois, but a tax on gross revenues is not fair to business owners or the people of Illinois.
Dennis Oles
Tinley Park, Illinois
Comment by Dennis Oles Saturday, Apr 7, 07 @ 11:12 am
Actually, the GRT minimum is $2 million, not $1 million. Also, you seem to be indicating that your projected annual gross revenues are about $4.5 million. I’m curious about how much of that comes from in-state sales.
I pointed out in the Capitol Fax this week that the governor himself is sometimes off-base with his remarks on his own tax hike. At one stop, the company he was visiting had total sales of less than $2 million, but he said something about how when they hit that $2 million mark they probably wouldn’t mind paying the GRT because they were making much more money and they’d have cheaper health insurance.
Trouble is, the company only sold 20 percent of its product within Illinois, so they’d have to have gross receipts of about $10 million a year before they’d get hit by the GRT. You know something is complicated when the chief cheerleader can’t even explain it right.
As I said, the tax only covers revenues from in-state sales. Also, if you move to another state and sell back to Illinois, the tax would be imposed on that revenue.
I’ll be curious to see how you respond. And I’ll make sure it’s posted this weekend if you do. Thanks.
Comment by Rich Miller Saturday, Apr 7, 07 @ 1:34 pm
Taking a look at your company’s client list it looks like the vast majority of them are out of state, with several international clientele. So, are you projecting $4.5 million for just your in-state clients or for everyone?
Comment by Rich Miller Saturday, Apr 7, 07 @ 7:14 pm
Rich, You are correct in that currently only about 20% of my business is derived from Illinois clients. Our current sales are well over $2M. But my projections are based on a new product we have developed and services that will be predominately servicing local companies.
There is potential business for this new product in other states but I would prefer not having to uproot myself and my employees.
Comment by Dennis Oles Sunday, Apr 8, 07 @ 9:14 am
I can’t understand why there is not more talk of a campaign for amending the state constitution to permit a graduated income tax. Without that, all of the proposals put forth so far have extremely regressive characteristics. Although the formal requirements for amending the constitution look daunting, in fact there have been numerous amendments in the life of the constitution, and only one permanent tax increase–it is demonstrably easier to amend the constitution than to raise taxes.
Comment by jake Sunday, Apr 8, 07 @ 6:26 pm