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* Despite what you may read, not every business is upset at the GRT. It turns out, there’s a big loophole for many of the state’s most profitable companies…
Gov. Rod Blagojevich’s proposed gross-receipts tax — which he argues will create fairness by forcing corporate “fat cats” to pay their share — would cut taxes for at least a few of the most profitable corporations in Illinois.
The Chicago Mercantile Exchange, the Chicago Board of Trade and an unknown number of other highly profitable corporations would apparently pay less under the proposed plan. […]
One of the biggest winners in the new tax regime would be the Merc, which last year paid $30 million to $40 million in Illinois state taxes, according to its chairman, Terrence Duffy. Even if all $1.1 billion of the futures exchange’s revenue is subject to the proposed 1.95% gross-receipts tax — unlikely, since much of its business comes from out of state and would not be taxed — its tax bill would be just $21 million.
“If a gross-receipts tax supplants the state (income) tax, it could actually benefit us,” Mr. Duffy says.
* Meanwhile, the governor has done his level best to stamp out all talk of an income tax hike, but AP stories like this won’t help…
Groups are lining up to embrace Gov. Rod Blagojevich’s plan to spend billions of dollars on family-friendly programs. They want the new schools, higher teacher salaries, better health care and expanded child-care services.
They aren’t nearly so enthusiastic, however, about the tax increases that would be necessary to pay for it all. […]
Protesters converged on the state Capitol to demand more education money Wednesday, but most speakers carefully avoided endorsing Blagojevich’s tax plan.
Even groups that support the tax, such as the Illinois Hospital Association, rush to point out that they do so because it appears to be the only viable plan right now. If another gained momentum, they’d consider supporting that option instead.
* Here’s a Tribune story on the same basic subject, “Give us the money, but not the GRT”…
The Civic Federation of Chicago, a nonpartisan research group, called for rejection of Blagojevich’s controversial gross-receipts tax on businesses. The federation said it would “overburden Illinois businesses and consumers.” Instead, the group advocated an increase in the personal and corporate income taxes to stabilize the state’s precarious financial health.
* And the Illinois Education Association seems to be getting some push-back from a few of its locals over the union’s support of the gross receipts tax, including in the Metro East…
Metro-east educators are pressing state legislators to increase funding through a proposed increase in income taxes.
The [IEA] rally was a general push for legislative action, but educators in the Triad and Highland school districts said they favor the income-tax focused House Bill 750 over Gov. Rod Blagojevich’s tax proposal.
* More tax and spend articles, compiled by Paul….
* Civic Federation report slams governor’s budget
* Group calls for income tax hike
* Editorial: Tax swap a better solution than the gross receipts tax
* Erickson: Taxes, electric debate set to collide
* Selling tax with a spin:
* Robert Rich: ‘Illinois Covered’ plan lost in shadow of GRT
* Summary Box: Groups divided over governor’s tax plan
* Illinois State Medical Society protests Blagojevich health plan
* McQueary: What are your predictions on tax plans?
* Kadner: Blago puts self-interest over the public
posted by Rich Miller
Monday, May 7, 07 @ 9:06 am
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Stick a fork in the GRT and while your at it, Rod Blagojevich too.
Comment by Mole' Monday, May 7, 07 @ 9:37 am
Rich –
One would assume from the line up above that all parties are in favor of a tax increase of some type.
Are there no articles, etc., for us to view which oppose a tax hike?
Comment by Truthful James Monday, May 7, 07 @ 9:59 am
Truthful, I didn’t see any today, which doesn’t mean there are none. As I’ve said many times before, don’t read too much into the absence of anything. I can’t be everywhere all the time, contary to popular opinion.
Comment by Rich Miller Monday, May 7, 07 @ 10:53 am
As in most places, the Illinois public has difficulty focusing on more than one major government issue at a time. Right now the spotlight is on the GRT. Illinois residents are being regaled with likely mythical stories about businesses storming out of the state and about increases in consumer prices. Meanwhile, Blago doesn’t seem to have the political skills to overcome the predictable opposition of the business community. The GRT does, after all, make it a lot harder to cheat. If it dies, well, business community 1, taxpayers, 0.
On to the tax swap, which largely falls on the middle middle and upper middle class. The rich, who send their kids to private school and who would barely feel it if state income taxes rose, don’t care. The so-called poor and working families will get a free ride via the earned income tax credit. It’s the middle and upper middle class who will pay for 750, while everybody else cheers.
Will those who pay receive rewards proportionate to their sacrifice? Of course not. There is no guarantee that their property taxes will stay down for more than a hot minute. Teacher and administrator salaries will rise dramatically, with no improvement in actual schooling. And when school boards like Cicero get their hands on handouts of almost $20 million (per Ralph Martire’s website) does anybody think that money will be well spent. Those who do should consider the tale of School District 189, recently released from federal oversight, still with a multimillion dollar deficit, which purchased $3000 high tech personal computers for each of its school board members last year.
Those folks over in Cicero must be absolutely salivating.
Comment by Cassandra Monday, May 7, 07 @ 1:05 pm
What this goes back to is the fundamental flaw of taxing businesses based of a revenue and ignoring profit margins, business with low profit margins will be hurt as they will see the effective percentage of their profits that are bad tot he state rise and companies that have high profit margins will see it drop.
The debate should really start out with whether or not we need a tax increse, what programs can be cut and should we add any major new spending programs and what their effect coupled with any tax increases would be on the state economy.
Comment by RMW Stanford Monday, May 7, 07 @ 1:51 pm
Truthful James,
Allow me to steer you an op-ed that Mike Van Winkle and I wrote a week ago: http://www.illinoispolicyinstitute.org/articles.php?articleid=47
Comment by Collin Hitt Monday, May 7, 07 @ 2:34 pm
HB750 doesn’t look much better than the GRT. Why aren’t we having a discussion on how the education system should be changed in Illinois before we talk about this big tax increase? I would like some details on how this money will be spent. What percentage will go to school construction? What percentage will go towards teacher and administrator salaries? How will it be distributed fairly so the bulk of it doesn’t go north of I80? Throwing money at this problem won’t do anything without a plan. I suspect most of this rhetoric about the “poor children” is more about rasing salaries that aren’t too shabby to begin with.
Comment by Holdingontomywallet Monday, May 7, 07 @ 8:07 pm
Because of the local control concept in matters of public schooling, I odn’t think that the money can have a lot of strings on it. It’s for the locals to decide. That’s what makes me nervous about giving it to places like (but by no means only) Cicero, which has a legendary reputation for corruption going back decades.
Comment by Cassandra Tuesday, May 8, 07 @ 12:44 am