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Governor's proposed gross receipt tax concers local
businesses
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| By:Ron
Clements |
April 19,
2007 |
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Illinois Governor
Rod Blagojevich's proposed gross receipt tax to raise $6 billion for
education and health care has good intentions, but the impact of
such a bill could be devastating to the state economy.
Blake
Roderick, manager of the Pike and Scott County Farm Bureau, said the
local community tax on produced goods could drive business in border
counties like Pike across state borders.
Don Hannel of Hannel's
Service Station in Pleasant Hill agrees that local businesses that
purchase materials from in-state suppliers may look elsewhere for
their products. Hannel said "one way or another," the tax would lead
to higher prices for everybody.
"Whether it affects us directly
or indirectly, it's gonna affect everybody," Hannel said. "Whether
it's on the bigger corporations, it's gonna be passed down to us and
the consumer."
Roderick added that the bill, which Blagojevich
and his chief of staff, Becky Carroll, said would only impact 15
percent of businesses, would affect everyone.
"Anybody in the
line of production would be taxed," Roderick said.
Roderick
quoted one state representative as saying the bill has "a little
south of a snowball's chance in hell of passing."
David Graham, a
Pittsfield resident, is hopeful Roderick is correct.
"I have a
little more faith in the Congress rejecting it than the Senate,"
said Graham, who referred to the Senate as a "rubber-stamp Senate"
led by Emil Jones. "I don't know if they'll reject it, but I
fervently hope so. Too many people do not realize that they pay
business taxes. The tax is just an awful representation to the state
of Illinois."
According to Roderick, it would be the largest
single tax increase in state history. What a gross receipts tax is,
is a broad-based, low-rate tax imposed on all income received by a
business without any deductions for costs of doing business, such as
wages, according to the Center for Tax and Budget
Accountability.
Blagojevich's office initially said the tax,
which has been criticized for its pyramid nature, would be for
businesses generating more than $1 million in gross receipts. He has
since upped that number to $2 million to benefit locally owned small
businesses.
Local business owners are skeptical about whether or
not the governor's plan would actually work, and David McCartney,
co-owner of both Giovanni's Pizza and McCartney Real Estate in
Pittsfield, doesn't believe Blagojevich is a supporter of small
business. He added that the increase of minimum wages looks good on
paper, but does not really benefit anyone.
"If minimum wage is
going up, but everything they buy costs more, too, are they really
winning?" McCartney asked. "That's probably bigger in this area than
this gross receipts tax. It looks good for his voters in Chicago,
but when you look at the broad spectrum, it's not good for small
business."
McCartney doesn't feel that the gross receipt tax
would affect his business directly, but knows everybody will feel
the impact.
"I don't think it will affect either of our
businesses unless if there's some underlying legislation," said
McCartney, who added that he has been forced to increase pizza
prices because of the wage increase and the tripling of Giovanni's
electric bill. "I'm concerned about everything he does because it
seems like this governor is running small business out of state. Any
time you're going after businesses, it can't be good."
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| ©Pike
Press 2007 |
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