Governor picks a fight; working families take the hit
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[April 07, 2007]
"I just am dying to have this fight, because it is long overdue." --
Gov. Rod Blagojevich, as he began a four-day tour of the state to
promote his record-breaking $7 billion tax increase.
Less than a month after proposing the largest tax increase any state
has seen in almost 50 years, Gov. Blagojevich announced a $1 billion
increase in the total tax he would like to levy.
Although portrayed as a tax on business, most budget experts and
even the governor's own running mate, Lt. Gov. Pat Quinn, have said
the tax would really be paid by working families, in the form of
higher prices and less wages.
As originally proposed, the tax would be imposed on any business
with gross receipts in excess of $1 million. In the face of
criticism that the tax would hurt small businesses, the proposal has
been revised to apply to businesses having gross receipts in excess
of $2 million. But, in order to offset the higher exemption -- and
to include modest property tax relief -- the governor increased the
proposed rates on the tax by 8 percent for service industries and by
70 percent for manufacturing and agriculture.
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Although the governor claims this is a "fairness tax," he has
neglected to take into account that his tax is, in essence, a
legalized pyramid scheme. With the median household income in
Illinois estimated to be about $47,000, the pyramiding effect of the
gross receipts sales tax will cost the average household almost
$2,000 per year in additional tax payments to the state.
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