The lead story in Capitol Fax yesterday was about widespread rumors that the governor will call for a “gross receipts tax” on Illinois business to pay for all of his ideas. Business lobbyists are gearing up like crazy to fight the idea, which the governor’s office won’t confirm even exists.
I didn’t notice yesterday that Small Newspapers also had a very good story on this topic until the reporter pointed it out to me. So, here it is…
Gov. Rod Blagojevich is reportedly considering a gross receipts tax on Illinois businesses to pay for a plan to provide state-subsidized health insurance to state residents without coverage. […]
Depending on its final form, a gross receipts tax could hit every business in the state, from barbers to manufacturers. The barber, for example, would pay the gross receipts tax on whatever he took in, likely apart from any income tax he might have to pay.
Even if the business was losing money, the gross receipts tax could apply.
Business lobbyists contend a gross receipts would be passed to consumers, and in the case of manufactured products could add significantly to the cost of finished goods.
“You could go from your raw material to your final product and it could get taxed five times in-between.” said Kim Maisch, Illinois director of the National Federation of Independent Businesses. “The concept of a gross-receipts tax is really anti-free enterprise.”
The tax revenue estimate I heard earlier this week was over $9 billion a year.
Thoughts?