If a gross receipts tax is superior to an income tax or a sales tax, why isn't Illinois using it already? Why aren't other states?
If the tax makes less sense than the sales tax or income tax, does it make sense to enact it just so a politician can say, "I didn't raise the sales tax or the income tax"?
If It Walks Like a Duck...
· 2 years ago
Wow, read the comments following the linked article, too. Looks like they ain't forgetting in Forgotonia.
Voice of Reason
· 2 years ago
The article in Small Newspapers presents only the negative side of the gross receipts idea, and printed comments only from the "business community." Given that our current business taxes are inefficient and idiosyncratic (for example, how many businessess actually pay any/substantial state corporate income taxes?), and that our sales tax applies to only the sales of goods, which is a declining sector compared to services, why shouldn't we consider an alternative system of taxation? Many other states are--recently Ohio instituted a form of gross receipts tax, and they are under debate in other states--and several states already have gross receipts taxes, instead of corporate income taxes. Some also have a sales tax and some don't. The point is that the powerful business lobbies have a vested interest in painting the most negative picture of this, without any analysis of actual impact. A low rate gross receipts is unlikely to result in prices that are 10-15% higher--and a rigorous economic analysis would be required to verify any tax impact assumptions.
DOWNSTATE
· 2 years ago
All the increases on small businesses the last 4 years,high rates on comp insurance,almost double utilities and now a special tax.Two questions!How many small business owners will throw in the towel and how many corporations will find it cheaper to move out of state.This current bunch of Democrats want to crate a welfare state to increase votes for the party but it soon becomes a liabity.Didn't their parents teach them that 'nothing is free.
Voice of Reason
· 2 years ago
Indeed, nothing IS free, including education, transportation infrastructure and health care--all of which benefit the public good and not only select individuals.
A gross receipts tax can be structured so that it exempts the first $000,000 of receipts, in order to protect small businesses. And in addition to considering the elimination of the corporate income tax, the state could rescind some of the fees that have distortionary economic effects.
NO ONE wants their taxes to go up, for any reason. That is why government is not the "private market" since in that case the public good is not served by purely individual best interests.
fedup dem
· 2 years ago
This is a disgutingly-regressive tax idea, one so bad that I wouldn't even expect it from the most rabid Republicans around, much less an alleged Democratic progressive like Gov. Sleazy.
Truthful James
· 2 years ago
Desperation is the mother of all chaos.
Perhaps they could tax campaign contributions and bribes as well.
Commonsense in Illinois
· 2 years ago
Truthful James has a point. Why wouldn't contributions to a political campaign fund be considered part of gross receipts? (Methinks the Governor just blanched...)
VanillaMan
· 2 years ago
The last thing Illinois needs is another tax.
Blagojevich knows this. That is why he has been promising no new taxes.
This administration is driving away businesses and forcing up the cost of living. This is bad government.
Stop promising freebies for votes. Start governing like adults.
FESTER
· 2 years ago
Would that include contract lobbiest gross receipts? Hmmmm.
Carl Nyberg
· 2 years ago
Reason, your logic would be more convincing if the gross receipts tax was part of a simplification package that was revenue neutral.
But as proposed it sounds like a way for the Blagojevich administration to get $9 billion/year in new revenue while being able to claim "no increase of sales or income taxes".
Anon from BB
· 2 years ago
This sounds like a value-added tax.
Bad idea, especially for the Dems. The people that will be most hurt by this tax are the ones that can least afford goods and services.
Just another reason why I'm planning to leave the state after I get my grad degree...
Bill
· 2 years ago
Sounds like A PLAN!!!
RMW Stanford
· 2 years ago
This a flat out bad idea for the state, Illinois has over the Blagojevich term has developed an increasingly hostile climate to business, this will just add to it and hurt economic and job growth here . Its one thing to tax business on there profits, but its another thing to tax them on their revenues, so that business that do not earn a cent in profit and suffer loses will also have an added tax liability. I am going to guess that the plan is to add this tax on top of the sales and corporate income tax. In the long run taxes are paid by people, not by firms, even if the tax results only in a prices increase of 105-15%, what would ended being a 10%-15% across the board price increase for business in the state Illinois would have the effect of lowering the real income of everyone in Illinois, rich, middle class and poor likely. Would have the large effect on the poorest sections of society, who spend almost all of their income on goods and services and in turn would see their real income decline by more than the middle and upper class who usually save and invest some of their income.
This Guy
· 2 years ago
Wow. Some plan.
"Let's stick it to the businesses who serve the people so we can say we're not sticking it to the people we say we're serving."
Business as usual.
"Bill": I admire your steadfast loyalty, but Stevie Wonder could see through this snake-oil salesman.
Q: What's the chief physical difference between Blago loyalists and blind people?
A: Blind people have souls.
anon
· 2 years ago
A way around this is to not make anything in Illinois and only pay the tax when it finally comes to the state in the form of a finished product for sale. A gross receipts tax will be at a very small percentage, usually under 1%, so that should avoid a heavy increase in the final price of a certain product. Also, the higher the price of a particular product that has this tax hidden in the final price, the more the state sales tax will bring in. Unless you're captive to buying products entirely made and sold in this state, it would be cheaper to just buy it in another state or only buy products in this state made in another state. But who really knows what those are. Go by the retail price.
Truthful James
· 2 years ago
The hard cheese is taxing businesses who are losing money already. At the margin a restaurant going out of business as it tries to build it revenues over time to breakeven, is going to put people on the street.
RMW Stanford
· 2 years ago
"A way around this is to not make anything in Illinois and only pay the tax when it finally comes to the state in the form of a finished product for sale"
It will certainly encourage that, along with encouraging firms and consumers to make large purchases in neighboring states, instead of in Illinois. As it already been mention this will push business that are at the margin and trying to build up a costumer base out of the market and may well make some business that have a lower profit margin, unprofitable. This will be flat out bad for the state's economy and the poorer sections of the state populace will be hit the hardest.
Gene Parmesan
· 2 years ago
I'd love to see if this will apply to agriculture in Illinois. If it does, farmers are going to be hit hard. Farmers take in a lot of revenue, but don't necessarily make a large profit due to the large costs involved. This idea will destroy rural economies, as farmers can hardly 'move' their land out of Illinois.
Who else will this not apply to as well? Whoever can cough up the most cash?
This idea may be just what the Republican Party needs in Illinois. Business groups will all get together and fight this with furor.
Love the madness
· 2 years ago
Indiana, Wisconsin, Iowa, Missouri and Kentucky all support this idea. They welcome all the Illinois businesses that will be coming to their states!
Utility Infielder
· 2 years ago
Voice, all good points. But..first what's the chances they will structure the bill with the protections for the small business'. Secondly, retail has shrunk, especially near the boarders. Why do we think that service businesses wouldn't follow. My doctor moved a few blocks over the boarder because of insurance reasons. Now my mechanic, accountant,masseuse ect. will follow.
Truthful James
· 2 years ago
Gentlemen (and ladies):
We are all wrong.
The most underreported story has to do with the removal of pork from the budget on a large scale, the development of efficiencies in government operations, the use of increasing sales and income tax revenues (resulting from the Bush tax cuts) to be assigned to capital and pension funding rather than hiring more people.
Didn't hear about that? Neither did I. Which must be why it is clearly underreported.
Citizen A
· 2 years ago
..."a plan to provide state-subsidized health insurance to state residents"... - If the state is going to provide health insurance then businesses would be well served to discontinue providing group plans. Shift the entire health costs to the taxpayers ? The governor is STUPID ! Like a little boy playing with matches . . . or in his case, himself.
Lovie's Leather
· 2 years ago
It is pure insanity. It is an invisible sales tax, and I just bet Bill won't understand why his $10 haircuts turn into 12, or 15 bucks. He will probably blame it on business.
Yellow Dog Democrat
· 2 years ago
This is Mr. "No New Taxes", right? Now that Rod's $9 billion tax increase on businesses and consumers is floating around out there, the more modest education funding reform plan that includes property tax relief and closes our pension debt must look pretty good to the business community.
Citizen A
· 2 years ago
The gov should have his numbers guys at CMS and BOB figure out how much $$$ businesses need to cover their costs and then simply confiscate the rest. That apparently is the democrat master plan, both state and federal. Just DO it and put a stop to this drip drip drip chinese water torture approach to "governing".
i d
· 2 years ago
Governor Foolish Ultimate Politician of Madness.
Truthful James
· 2 years ago
Citizen A --
That was the old Ted Kennedy plan...The government has the right to 100% of GNP and all taxes thereon. Then it can decide whhat part of the national income may be delivered to its citizens. It really is simpler that way.
Guy Fawkes
· 2 years ago
What happens when there are no businesses left to tax? Don't worry, Governor Blagojevich won't, he'll be long gone.
steve schnorf
· 2 years ago
I think Bill is right. If it is proposed by the Governor, it at least represents a plan; in fact, the only plan. Perhaps it will elicit counter-proposals or alternatives from some of our other leaders. Until Meeks re-introduced 750 today (so I heard) not another government leader had suggested any plan to deal with our structural budget imbalance.
Truthful James
· 2 years ago
Steve --
Thanks for admitting that 750 is not a supposed tax swap, but merely a way to increase taxes for a supposed structural imbalance.
Still looking for the unreported stories to which I earlier referred.
When a "balanced budget" can be adopted and specific appropriations do not include the windfall each year from increasing income and sales taxes, it would seem that the structural imbalance lies on the side of surplus -- until, that is, the covert appropriations using up all that surplus are made to benefit the governor playing Johnny Appleseed, and the incumbents providing much quid for a future quo.
Concerned Voter
· 2 years ago
Wow, hit the small business owners with increases in the minimum wage and then with this, we'll be seeing more empty shops & restaurants.
the old republican
· 2 years ago
Didn't Laura Lunt Prussing, the Dem. one term state rep.from Champaign have an idea like that or taxing about everything in sight a few years ago?
Citizen A
· 2 years ago
Maybe we don't need a PLAN - Just don't spend the state into poverty! This is Blago's crisis - without him we might not be in such a terrible financial delemna. Hope Mike and Emil have the balls to reign in this megalomeniac. God help us if they don't. Blago is NOT the solution - he IS the problem.
Nostradamus
· 2 years ago
We don't need a new tax. If the state would collect sales tax on magazines and newspapers,we would have plenty of $$$$$ for education. Then we wouldn't have to sell the lotto and tollways. All the states that are contiguous to us charge sales tax on those two items. Just think of all the magazines that are sold daily, the subsriptions and all the papers. Mega millions !!!!
Bill Baar
· 2 years ago
Wow, beware the progressives.
Concerned Taxpayer
· 2 years ago
Gross receipts taxes are discredited taxes that are making a comeback solely because they allow a state to hide the tax burden, either by embedding it into business to business transactions or by using the gross receipts tax to collect revenue from "outsiders."
Gross receipts taxes used to be very widespread but most states repealed them (including Indiana as recently as 2002) because they were so harmful.
These two articles contain numerous economic reasons why they should be rejected:
All Comments
If the tax makes less sense than the sales tax or income tax, does it make sense to enact it just so a politician can say, "I didn't raise the sales tax or the income tax"?
A gross receipts tax can be structured so that it exempts the first $000,000 of receipts, in order to protect small businesses. And in addition to considering the elimination of the corporate income tax, the state could rescind some of the fees that have distortionary economic effects.
NO ONE wants their taxes to go up, for any reason. That is why government is not the "private market" since in that case the public good is not served by purely individual best interests.
Perhaps they could tax campaign contributions and bribes as well.
Blagojevich knows this. That is why he has been promising no new taxes.
This administration is driving away businesses and forcing up the cost of living. This is bad government.
Stop promising freebies for votes. Start governing like adults.
But as proposed it sounds like a way for the Blagojevich administration to get $9 billion/year in new revenue while being able to claim "no increase of sales or income taxes".
Bad idea, especially for the Dems. The people that will be most hurt by this tax are the ones that can least afford goods and services.
Just another reason why I'm planning to leave the state after I get my grad degree...
"Let's stick it to the businesses who serve the people so we can say we're not sticking it to the people we say we're serving."
Business as usual.
"Bill": I admire your steadfast loyalty, but Stevie Wonder could see through this snake-oil salesman.
Q: What's the chief physical difference between Blago loyalists and blind people?
A: Blind people have souls.
It will certainly encourage that, along with encouraging firms and consumers to make large purchases in neighboring states, instead of in Illinois. As it already been mention this will push business that are at the margin and trying to build up a costumer base out of the market and may well make some business that have a lower profit margin, unprofitable. This will be flat out bad for the state's economy and the poorer sections of the state populace will be hit the hardest.
Who else will this not apply to as well? Whoever can cough up the most cash?
This idea may be just what the Republican Party needs in Illinois. Business groups will all get together and fight this with furor.
We are all wrong.
The most underreported story has to do with the removal of pork from the budget on a large scale, the development of efficiencies in government operations, the use of increasing sales and income tax revenues (resulting from the Bush tax cuts) to be assigned to capital and pension funding rather than hiring more people.
Didn't hear about that? Neither did I. Which must be why it is clearly underreported.
That was the old Ted Kennedy plan...The government has the right to 100% of GNP and all taxes thereon. Then it can decide whhat part of the national income may be delivered to its citizens. It really is simpler that way.
Thanks for admitting that 750 is not a supposed tax swap, but merely a way to increase taxes for a supposed structural imbalance.
Still looking for the unreported stories to which I earlier referred.
When a "balanced budget" can be adopted and specific appropriations do not include the windfall each year from increasing income and sales taxes, it would seem that the structural imbalance lies on the side of surplus -- until, that is, the covert appropriations using up all that surplus are made to benefit the governor playing Johnny Appleseed, and the incumbents providing much quid for a future quo.
would have plenty of $$$$$ for education. Then we
wouldn't have to sell the lotto and tollways. All
the states that are contiguous to us charge sales
tax on those two items. Just think of all the
magazines that are sold daily, the subsriptions
and all the papers. Mega millions !!!!
Gross receipts taxes used to be very widespread but most states repealed them (including Indiana as recently as 2002) because they were so harmful.
These two articles contain numerous economic reasons why they should be rejected:
http://www.taxfoundation.org/publications/show/...
http://www.taxfoundation.org/publications/show/...