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Many government programs, on the surface, look good for everyone, but many times the end results of these proposals will be disastrous for everyone. We believe the Governor’s Gross-Receipts Tax will be a disaster not only for the businesses that will be forced to pay it, but the consumer who will have to pay higher prices for products and services produced by these companies. The ads and the talks being conducted before public bodies are already not reality. They are trying to compare it to the retail sales tax and that is far from reality. GRT taxes all transactions, including intermediate business-to-business purchases of supplies, raw materials and equipment. Therefore the tax is applied at every layer of production, meaning taxes on taxes on top of taxes for the given end product. Tax experts say that GRTs are ranked among the most economically harmful tax structures available to lawmakers.
Illinois already has a lot of economic problems in comparison to other states. Forbes has placed Illinois 44th as the best place to do business out of the 50 states. Only seven years ago Illinois was ranked to have the 3rd best business climate, they are now way below that. We have a problem with a rapidly declining business climate in Illinois.
The GRT will increase taxes for everyone, in one way or another and therefore will certainly add to the cost of living, working and investing in Illinois and will move Illinois’ fiscal policy in the wrong direction, especially at a time when many other states have moved in the opposite direction by cutting taxes. We need to look at the whole picture since business costs have seen costly increases in minimum wages, health insurance rates, oil price increases, stainless steel price increases, steel and wood price increases, electricity rate increases, grain and raw meat increases and the list goes on and on.
Remember that while the Governor focuses on the GRT with his campaign for his budget, he also is trying to slip a 3% payroll tax on all employers with ten or more employees. This tax is supposed to fund the new healthcare initiative he has proposed in his budget. The payroll tax will be required whether or not the company currently provides healthcare benefits. The new tax is anticipated to contain a refund or credit mechanism, but to qualify for full refund of the payroll tax the company’s healthcare benefit plan must be equivalent to at least 4% of all payroll.
These proposed taxes are bad for business…these taxes are bad for the State of Illinois. We encourage the Legislature to not pass these very destructive taxes.
Thank you for explaining this and in a really understandable way. I think it is very helpful to know what this means for businesses and consumers alike.
What can concerned consumers do? Should they contact their legislator??