Wednesday, April 25, 2007

Gross Receipts Tax Losing Support in Illinois

Illinois Governor Rod Blagojevich (D-Handbasket) had two problems.

His first problem was that the State of Illinois had been having trouble paying its bills for several years. Schools were complaining about inadequate concierge service in faculty lounges. Gild work in some school board restrooms was wearing completely away, allowing the brass under the cheap gold plating to become tarnished when students could no longer be taught how to polish it. And the teachers have also had to endure the endless complaints from whiny State employees, whose pensions have not been fully funded any time in recent memory.

The Governor's second problem was that he didn't know how to best go about addressing the woefully undertaxed nature of the people of Illinois. They were just not willing to give as the Governor knew they should. And while they complained a bit, only a few elderly people a month were losing their homes when they couldn't pay their property taxes. An income tax increase would be electorally risky, and the State Legislature had been forced to grant gaping loopholes in the corporate income tax structure to keep ungrateful employers from fleeing under cover of night to nearby Indiana or Wisconsin.

Yet his plentiful taxing options didn't stop there. He could choose user fees on the vast amount of air covering the State, the sunlight pouring over it, and the rain slowly eroding it into the Gulf of Mexico. But the key was to make sure he didn't get blamed for raising taxes on voters, or at least, not by the majority of them.

His solution was bold: he would tax every transaction! It would be a hidden tax on those evil corporations. Whenever money changed hands anywhere in the State of Illinois, the government would take its cut. The Gross Receipts Tax could be used to pay for a massive expansion of Illinois government. And the best part was, in order to tax every transaction the Governor would need to know about every transaction. A huge new bureaucracy would be his to command, an information-gathering and enforcement arm that would let him put an end to the pesky charade of reelection campaigning.

Except that would not be enough. The GRT would not be used simply to balance the State's unbalanced budget, but to pay for another massive expansion, this time to supply a huge unmet need for medical paperwork. Everyone 3% more Illinoisans would get free less expensive medical care insurance. A new matching 3% payroll tax, a penalty on those employers who pay their workers with money instead of insurance paperwork, and a plan to sell the State Lottery would also be needed. Oh, how the paper would fly.

However, almost no one is buying it. People from all walks of life in Illinois are seeing the GRT for the regressive, economic poison that it is, despite Governor Blagojevich's hateful class-warfare demagoguery. Mom and pop would not lose their home to property taxes, because they'd never make enough to buy one.

Completely missing is the debate over whether gold plating in school board lavatories is really needed, when the State has to sell off assets and borrow money with bond issues to pay current expenses. Rather than debating where to liposuction away the State excess spending in the face of budget shortfalls, the Governor is demanding more for his plate.

It is possible that the Governor knew this plan would fail all along. Now that he's played the heavy, he can bravely struggle against that mean old General Assembly as they force an income tax increase on him. What a guy.

At least he's not charging us to breathe his air.

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