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* It looks like House Democratic staff might be putting pressure on members who go too far out on a limb on the governor’s gross receipts tax.
Case in point, Rep. Chuck Jefferson (D-Rockford), who told reporter Aaron Chambers a few days ago, “I’m not saying I’m totally supporting GRT… I’m leaning toward GRT, versus 750.”
But then…
The next day, Jefferson’s staff distributed a statement that Jefferson wanted to set the record straight. The statement, attributed to Jefferson, said the article’s description of Jefferson’s “warm view†was wrong.
On Tuesday, I asked Jefferson to isolate a single inaccurate element of the story, and he did not do so.
He said his staff told him to issue the statement to clarify his view. Business leaders, he said, interpreted the story as an indication of his definitive support for the GRT, and that it was important for him to counter such a perception.
Jefferson’s staff takes its orders from House Speaker Michael Madigan, a Chicago Democrat who appears cool to the GRT.
I asked Jefferson on Tuesday whether he continued to “lean†in favor of the GRT.
“I don’t know if ‘lean’ is a good word for it,†he told me. “I’m still looking at it in a better light than I am 750. ‘Lean’ is not a good word.â€
I also hear that Rep. Mike Boland (D-East Moline) got an earful from Madigan’s staff after he gushed over the GRT during Gov. Blagojevich’s bus tour a couple of weeks ago.
* Meanwhile, business groups and business owners tell the Tribune that they’re not happy at all with the way Gov. Blagojevich is selling the tax…
“To have your own governor declaring war on you with inflammatory language and citing Armageddon, well, it really sticks in my craw,” said Ron Bullock, chief executive of Bison Gear and Engineering Corp. in St. Charles.
* You mean stuff like this?
“You may not have as many corporate lunches as you did last year, or you may not give out bonuses as high as you did before,†[Blagojevich spokeswoman Becky Carroll] said.
* In the same article, Carroll pointed out a passage that I hadn’t seen before…
Blagojevich is hedging his bets, though. His plan, which is pending before the Senate, states that a gross-receipts tax “is a tax on the taxpayer and may not be separately billed or invoiced to another person.â€
“It’s to prevent them from passing this tax on to con-sumers, and if it’s not written as such they can do so,†Carroll said of this provision. “They could itemize the tax and bill it to a customer as is the case with sales or utility taxes.â€
* And the editorials keep coming. Belleville News-Democrat…
The tax would be applied at each step of the process: wholesaler, subcontractor, general contractor, developer and consumer.
A higher sales price means a bigger down payment, higher mortgage payments, and higher property taxes. In other words, more pyramiding.
Now think about all the products and services you buy, and you get a sense of how costly this proposal will be if it’s enacted.
Contact Blagojevich and your lawmakers about their position on the gross receipts tax.
The appetite for state funds is always larger than what taxpayers can provide. That appetite will turn into a frenzy if the gross receipts tax continues to be a part of the governor’s plan.
* More tax and spend stuff…
* Tribune Editorial: The pitter-patter of progress toward better schools
* Martire: Boost in earned income tax credit the fair thing to do
posted by Rich Miller
Monday, Apr 23, 07 @ 8:52 am
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The Gov needs to look at his own house! 70K raises to allies, unlimited use of state plane. He thinks he is in big business and he is using the Taxpayer $$ to do so.
Comment by He Makes Ryan look like a saint Monday, Apr 23, 07 @ 8:57 am
Nice try! Let’s not debate the state’s needs and a way to increase revenue. Let’s just all take cheap shots at Blagojevich instead.
Comment by Bill Monday, Apr 23, 07 @ 9:11 am
Mark my words. Its either Rods GRT or an income tax increase. What is Madigan going to propose? The speaker either support the GRT or he is raising peoples taxes… You think the business community is mad now? Wait til every Tom, Dick, and Harry gets fired up. Then the GRT will look like the right call. MJM is in a trick box!
Comment by Mr Brown Monday, Apr 23, 07 @ 9:19 am
Rich,
I’ve seen Carroll’s comment, or one like it already. The idea that it would be illegal for businesses to show the cost of the tax to taxpayers is one of the most hideous aspects of the GRT.
Besides the fact that it would be a gross restriction of a business’ First Amendment rights, it’s designed to protect government rather than taxpayers. Above all else, keep the taxpayer in the dark on how much it costs him or her. If taxpayers can somehow be protected from the truth, then the politicians might get a pass during the next election.
Madigan has it right. The GRT is the best thing ever designed for the Republican Party, but it will only work if Democratic lawmakers lay themselves on the line for Rod.
Comment by Down in Egypt Monday, Apr 23, 07 @ 9:55 am
Down in egypt -
Consumers are already in the dark when costs get passed on to them by businesses. The price on a gallon of milk increased over the last year as did the oil change at the local Jiffy Lube. Do you know why they went up? No. Businesses don’t itemize what drives each increase they pass on to consumers. GRT isn’t any different, but its cost would be far less on businesses and consumers than increases in the income tax or sales tax.
Comment by some perspective, please Monday, Apr 23, 07 @ 12:21 pm
What Blagojevich and company want to do now is focus debate on how wonderful Illinois will be when they get their way.
All they want is $8 Billion.
Ah, there’s the problem.
Blagojevich wants to fight this battle, (”God’s battle”) on political turf - which he excels.
What reality dictates is we need to focus on how much destruction his plan will have on our economy.
Ooops - reality wins!
Comment by VanillaMan Monday, Apr 23, 07 @ 12:36 pm
If the GRT is so great why should the Governor care if business itemize as part of their bill? Most of the cost of the GRT is going to be passed on to the consumer, if business want to let their costumers know were the add cost came from, why shouldn’t they? Other than it would hurt the Governor’s populist image.
Who said the debate should be just over how to raise state revenue? The debate should first be over whether or not the state need more revenue and the state’s spending priorities and the economy effect of any tax increase. Their are a lot of things that some people think it might be nice if the state did, but it does not mean the state should nessicarly do them or that the benefits out weight the economic cost.
Comment by RMW Stanford Monday, Apr 23, 07 @ 12:40 pm
Transparency and broad-based are two key tenets of tax fairness. The GRT fails on both counts.
1. The Governor is trying to hide the $7 billion tax by not allowing businesses to show it. He is afraid that they will add a line to the receipt called GRT tax.
2. By supposedly exempting 85 percent of businesses (and if you believe it I have some great ocean-front property for sale in Chatham), the tax is applied to only 15 percent of the population.
It’s a sham nearly as large as the one pulled on Gary Forby.
Comment by 4% Monday, Apr 23, 07 @ 12:57 pm
GRT “G-Rod’s Tax”
Comment by It's 5 O'clock somewhere Monday, Apr 23, 07 @ 1:49 pm
Ha-Ha!!
If the Governor’s staff thinks that this will stop Illinois businesses from passing the buck onto the Governor, they’re nuts.
If I worked for the Petroleum Marketers Association, I’d already have stickers up on every gas pump in Illinois that said “The price of gasoline in Illinois will increase 4 - 8 cents per gallon effective July 1st, 2007, thanks to Governor Rod Blagojevich’s Gross Receipts Tax.”
Comment by Yellow Dog Democrat Monday, Apr 23, 07 @ 2:00 pm
VM -
I think giving the over 1 million uninsured in this state — the far majority of which are working people — is a pretty wonderful thing. Helping small businesses get cheaper health care is also a wonderful thing, especially since they can barely afford to provide health care to their employees these days. States with a GRT are alive and kicking, so maybe a reality check in order…
Comment by some perspective, please Monday, Apr 23, 07 @ 4:30 pm
Rich — I think the word “pressure” and variations thereof leaves the wrong impression. I’m sure it didn’t take too much for staff to convince rank-and-file House Democrats that it probably wasn’t a great idea to get too far out in front on a tax increase that most folks aren’t giving a snowballs’ chance of passing, at least in its current form. In any case, Rep. Jefferson never said he was pressured, nor did Chambers.
Heck, even Jay Hoffman has yet to issue a press release saying he’s for the GRT or even make a public statement to that affect that I’ve read. Most people assume Jay’s for it, but I notice that SB 1 still doesn’t have a House sponsor. If you can get Hoffman on the record on the GRT, you’ll have a scoop.
I would say “advise” is a more precise term.
Comment by Yellow Dog Democrat Monday, Apr 23, 07 @ 5:16 pm
YLD, That is probably the funniest thing you have ever posted…”advise”? rofl
Comment by Anonymous Monday, Apr 23, 07 @ 8:36 pm
I can see it now. Jefferson to his staff: Are those brass knuckles in your pocket or are you just here to advise me?
Comment by Rich Miller Monday, Apr 23, 07 @ 8:52 pm
some perspective –
I agree. Health insurance is a wonderful thing, however, it does not necessarily need to cost billions of dollars. How can the past govenor of MA, Mitt Romney, provide health insurance to everyone in MA WITHOUT raising taxes, yet GROD needs only “a few billion of the taxpayers dollars”? Romney wrote an excellent article detailing his health insurance plan in the Wall Street Journal..I’m sure if GROD wanted to, he could follow the same paradigm in IL ….. but this method does not suit his love of money, power, and control over the taxpayers and businesses of this state. This whole GRT idea is all about GROD and his “legacy”.
Comment by tired of GROD Monday, Apr 23, 07 @ 10:46 pm