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On he bus…
Molly Parker of the Peoria Journal-Star is interviewing the governor now, so I thought I’d take a moment to blog a bit more.
Again, apologies for any typos.. We’re on a country road and it’s a bit bumpy on the bus right now.
So far, the only real “news” about the tour is just the existence of the tour itself. The local media has expressed quite a bit of interest. Reporters almost outnumbered local participants at the Peoria event.
Local legislators have been rare at the stops. Two showed up yesterday in Moline, and one attended the Galesburg event. None were in Peoria or Rockford. One showed up for the lunch in Elgin.
Most legislators have been panicked by the rhetoric on both sides of this GRT thing. Ill have more on that in tomorrow’s Capitol Fax.
The governor got his first Ameren question today, in Peoria. He didn’t say much about the issue, other than he supports the rate freeze, and that he was confident that the legislative process would work.
A Peoria radio reporter also asked what he would say to people who might lose their jobs after their company moves out of state after the GRT is enacted.
“It would be ridiculous to leave,” Blagojevich said, pointing out that the GRT would apply to out of state companies that sell goods and services in Illinois.
posted by Rich Miller
Tuesday, Apr 3, 07 @ 2:49 pm
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Who from Elgin?
Comment by Bill Baar Tuesday, Apr 3, 07 @ 2:52 pm
Ok, Noland… so how many of those Elgin companies over at Randall and the tollway will find it easier just to pick up and move rather than pay this tax? First Care just move more people over to India?
Not to mention how Steffens over at Cafe Magadelina would sort out the tax on those restaurant bills between residents and non residents.
Comment by Bill Baar Tuesday, Apr 3, 07 @ 2:57 pm
More media than spectators. Boy! That Governor’s a popular fella!
Is the Gov’s staff handing out any buttons or bumper stickers?
Comment by Drowning Quicksand Tuesday, Apr 3, 07 @ 3:14 pm
How would the GRT apply to out of state companies?
Comment by Crimefighter Tuesday, Apr 3, 07 @ 3:46 pm
“‘It would be ridiculous to leave,’ Blagojevich said, pointing out that the GRT would apply to out of state companies that sell goods and services in Illinois.”
————————————————
I wonder about this. It seems like this would be a one-time tax for out-of-state retailers sell within Illinois but who purchase materials and manufacture sell outside the state. However, Illinois businesses who buy materials and services from other Illinois businesses would be paying the tax at each stage.
Don’t see how that is good for Illinois businesses. Is that the way it works?
Comment by Fan of the Game Tuesday, Apr 3, 07 @ 3:51 pm
I guess what he means is that any good or service out state that is then sold in Illinois will by taxed through the retailer that sells it in the state. Still it will put Illinois based business at since if they buy business good or services from another Illinois based business it will be taxed each time, driving up cost. While the out of state company will only be taxed once and for that matter how would you apply the tax to an outstate of business that sells something out of state to a business and then the good is delivered or for business related services that are done out of state for consumers in Illinois? For companies that make raw materials and intermediate goods or in service industries were you dont have to be located in the State thats a big deal.
Comment by RMW Stanford Tuesday, Apr 3, 07 @ 3:58 pm
RMW:
“I guess what he means is . . .” ???
Assuming anything is dangerous with this fella. Parse his verbage very carefully.
Comment by Bubs Tuesday, Apr 3, 07 @ 4:07 pm
I think the Governor’s point is that why would you base yourself out of state since you would still pay the same taxes, but not be able to benefit from the healthcare plan - which is huge for small businesses (all businesses for that matter if it can stop the upward cost creep) - road projects, schools, etc.
I think the most under-reported aspect of the GRT is that it gets those out-of-state companies that sell to people in Illinois to actually start paying taxes on that activity. I think this would be the most significant component.
Comment by steven Tuesday, Apr 3, 07 @ 4:12 pm
Fan of the Game makes a good point.
Think about this, as well: The governor claims to be a champion of the middle class, but what about middle-class businesses that will be hurt most by his plan? Big, national, and multi-national companies that are making big profits elsewhere can absord the increase in Illinois, but not local, family owned mid-sized businesses….they won’t move, they’ll just close.
Comment by grand old partisan Tuesday, Apr 3, 07 @ 4:51 pm
Wow Molly & Gov. Dork one on one
I think I’ll drive to Peoria righ now to wait for the hard copy of the paper.
Since Rich did not answer ANY of yesterday’s questions, I think we can safely assume he is higher than a kite.
Comment by GettingJonesed Tuesday, Apr 3, 07 @ 4:54 pm
I have my doubts about how well he going to be able to make companies out of state pay his tax, how do you tax a sale to Illinois based company when the sale made out of state, but if he does it makes it pretty certian that the consumer will end up paying most of the cost of the tax
Comment by RMW Stanford Tuesday, Apr 3, 07 @ 5:00 pm
Good luck Rod. Unless it is a out-of-state company that sells a product exclusively in Illinois, they will stop or significantly reduce their amount of sales in Illinois and focus on other more friendly sales points.
Just think of tobacco companies, auto manufacturers, distilleries. Why continue to do business in Illinois if you will be taxed, extra, just for the honor of being able to market your goods in Illinois?
The consumer will have to eat the tax or stop purchasing the product - in Illinois.
Gee, should I buy my new car in Illinois and pay some ridiculous tax or should I go to IN, WI, MO where I won’t be gouged? Tough decision.
Just another fine mess Hot Rod is trying to create.
Comment by Papa Legba Tuesday, Apr 3, 07 @ 5:12 pm
Hold on. As I understand the proposal, the governor is misinformed just a tad (I’ll give him the benefit of the doubt that Doug Kane hasn’t fleshed out all the details for the governor). At least according to the draft I’ve seen, an out of state company would have to have nexus in Illinois to be tagged with the GRT. That’s easily gotten around, just end the presence and, presumably, you don’t owe…or if you do, is the State of Illinois now going to have Revenue police in every state to enforce Illinois tax law? It starts to get silly when you get to thinking about implementation (actually it makes your head hurt).
Comment by Commonsense in Illinois Tuesday, Apr 3, 07 @ 5:18 pm
===Think about this, as well: The governor claims to be a champion of the middle class, but what about middle-class businesses that will be hurt most by his plan? Big, national, and multi-national companies that are making big profits elsewhere can absord the increase in Illinois, but not local, family owned mid-sized businesses….they won’t move, they’ll just close.
This is exactly right–this benefits WalMart at the expense of mom and pop storefronts, distributors and producers.
The pyramiding effect hurts local businesses and middle class and poor consumers the most.
While I imagine GOP Partisan and I disagree strongly on the alternative course we would take, this bill is regressive in its impact on small businesses and consumers.
Comment by ArchPundit Tuesday, Apr 3, 07 @ 5:21 pm
Wow, so this could apply to an out of state business too? Sounds a little too Chicago for me.
“So we understand you want to sell products in my territory. That’s all well and good, but there’s a little matter of a fee that you have to pay in order to do business in my turf. Get the picture?”
Comment by Concerned Voter Tuesday, Apr 3, 07 @ 5:35 pm
Seems kinda lame for the reporters to be on the bus for the whole tour. It ain’t a presidential election. It’s a publicity tour on which the guv will give the same speech and the same answers to the same questions in every city. Laaaame.
Comment by OrangeCrush Tuesday, Apr 3, 07 @ 5:49 pm
Concerned voter, I think maybe the Uniform Commercial Code might have something to say about that, but I could be wrong.
What makes me crazy is, day after day I listen to the stories and testimonials around this insurance thing and NOBODY can show me in the bill where the insurance industry has to do ANYTHING different from what they do now, what with the cherry-picking of patients, sudden one-sided take-backs and revocations, excessive use of the pre-existing condition racket, impractically high deductables or exceptions to coverage… all of which makes your expensive policy worthless if you ever try to actually use it. Rod’s subsidies to people getting this bad or sub-par coverage only puts them into a system that’s horribly damaged and unfair right now. It’s like sending citizens a tax rebate to cover their newly raised power bills, instead of regulating the power companies to charge a fair rate.
The insurance companies are partly to blame for their gouging techniques and obscene profits, and all Rod’s vaunted program does is secure them an even larger, state-backed, taxpayer-funded revenue stream, with NO reforms, no incentives, no increased competition, or anything. My lord, the insurance companies must wield a lot of power and political influence, to silence event the HINT of debate about this issue.
While we’re all singing this chorus of “everybody contributing a fair share”, ask Righteous Rod why do the insurance companies deserve to get such a big break? Is it because they are huge campaign contributors? They have caused at least part of this problem themselves. Rod’s program rewards them for it.
Comment by Gregor Tuesday, Apr 3, 07 @ 6:07 pm
Rod got heckled in Peoria. State troopers chased the guy out.
Comment by Played in Peoria Tuesday, Apr 3, 07 @ 6:10 pm
Any talk of cancelling the rest of this failed “bus tour” ? This guy is a bad joke and no one is laughing. Be sure, Rich, to keep the garlic necklace on.
Comment by A Citizen Tuesday, Apr 3, 07 @ 6:23 pm
Any talk of cancelling the rest of this failed “bus tour” ? This guy is a bad joke and no one is laughing. Be sure, Rich, to keep the garlic necklace on.
Comment by A Citizen Tuesday, Apr 3, 07 @ 6:23 pm
… State troopers chased the guy out. … - With A HAIRBRUSH, boy did he run and hide behind mommy.
Comment by A Citizen Tuesday, Apr 3, 07 @ 6:26 pm
ok.. so I have moved my business to … say Wisconsin, or Missouri, and I sell my widget to a company here in IL, how do I pay a tax? All I did was make a sale and .. wait no, thats a sales tax and we aren’t raising those,
or I do pay a tax and now I have just raised the price of the widget to cover my IL tax bill,
or I tell you that it is FOB WI send whatever truck u want to pick up your widgets and I dont pay a tax,
but wait that assumes that there is a maufacturer that hasn’t moved over to MO or WI w me…lol.
The only ones paying teh taxes are the distrbuters in those huge wearhouses in bolingbrook, waiting to send stuff to the unemployed folks and the bankers and traders in Chicago.
Comment by The Horse Tuesday, Apr 3, 07 @ 6:33 pm
the guv did get heckled in Peoria but nobody chased him out. I was standing right next to him. he walked out right after he said “this is bullcrap.”
Comment by Rich Miller Tuesday, Apr 3, 07 @ 7:13 pm
When one looks at the GRT, increased minimum wage, high workers’ compensation costs, and skyrocketing electricity costs, it’s a wonder any business that has the ability to move stays in Illinois.
Comment by Fan of the Game Tuesday, Apr 3, 07 @ 7:27 pm
…he walked out right after he said “this is bullcrap.  WOW !!! Even He is starting to get it. Hope yet for an epiphany.
Comment by A Citizen Tuesday, Apr 3, 07 @ 7:29 pm
Papa;
Buy a car out of state and when you go to the SOS to license and ttitle it you have to pay the difference before you will get you plates and registration.
Illinois would be better off to hire more auditors and go after the companies that sell and deliver goods into Illinois and do not collect or remit sales taxes.
They should do someting similar to the tobacco companies they went after. The companies provided lists containing customer name, address and purchases and Revenue sent them letters demanding the sales taxes they avoid by buying mail order.
Under Illinois law anytime you buy an item out of state and do not pay tax you are required file form ST44 and self access the tax. How many people do this? Don’t know. Would be a good place to start.
Also they should review the amount of business the companies are doing and shipping into Illinois. If they meet the criteria of having NEXUS in Illinois then they will be required to register and file a monthly tax return - just like the legal businesses in Illinois are required to do.
Instead of a record tax increase how about enforcing the laws we currently have on the books.
Comment by State Worker w/ MBA Tuesday, Apr 3, 07 @ 7:49 pm
Typos - due to bumpy roads, due to no capital program for years, due to legislators afraid to give the governor more money to spend - on a bus trying to raise support for the GRT - which few legislators support because they are afraid to give the governor more money to spend….. Wow!
Comment by Cat Tuesday, Apr 3, 07 @ 7:54 pm
“A Citizen,” the opponent walked out immediately. I’m not sure if you understood that correctly. At least the Quincy opponents had the guts to stick it out all the way through. He just said his piece and split.
Comment by Rich Miller Tuesday, Apr 3, 07 @ 8:25 pm
Rich, Thanks for the clarification, I did misunderstand. Enjoy your tour - looking forward to your recap of the trip when you get back.
Comment by A Citizen Tuesday, Apr 3, 07 @ 8:40 pm
Those who see a closing of corporate loopholes as an alternative to the GRT, think again.
Do you really think the lobbyists and feckless legislators who advocated for those loopholes are going to stand down. After all, one person’s loophole is another person’s good tax policy. Each loophole would have to be fought out individually, and it would take years, with no promise of success.
The Illinois economy will survive the GRT. And in a regional economy, I have choices in what I buy and how much I spend for it. But a two percent income tax increase is a sure thing and forever. I’ll take my chances with the GRT. It’s cheaper.
Comment by Cassandra Wednesday, Apr 4, 07 @ 2:13 am
It is to much effort for the legislators to do their job right and close the loopholes so lets just attack the evil businesses (an evil business being anyone with gross receipts higher than 2 mil, even if they are losing money.)
Comment by leigh Wednesday, Apr 4, 07 @ 8:33 pm