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"What the sponsors of this ad deliberately don't tell you is that
the average individual taxpayer in Illinois pays 10 times more in
state income taxes than thousands of the wealthiest businesses,"
Blagojevich said. "Now that we're asking those businesses to pay
their fair share so regular working families can afford health care
and can send their children to quality schools, Big Business is
resorting to distortions and scare tactics. We're going to keep
working hard to make sure the public has access to the facts about
how the current tax system is stacked against individuals and
families -- and how our Tax Fairness Plan makes sure Illinois
businesses stay competitive while requiring all entities that
conduct business in our state to help support education and health
care."
The governor has proposed a new tax system, the gross receipts
tax, to replace the corporate income tax, which is a flawed and
broken system that places an unfair burden on individuals to pay for
state services. Illinois tax structure is one of the most regressive
and unfair to working families in the nation. The state income tax
burden lies primarily with individuals -- many of whom are
struggling to make ends meet -- while the burden on businesses has
gone down, even while corporations are posting record profits. In
fact, many large corporations pay little or nothing in corporate
income taxes.
Most economists agree that while all taxes are disruptive to the
economy, one with a broad base and low rate is the least disruptive
and treats all businesses fairly. The gross receipts tax is exactly
that. It taxes all businesses within their sector at the same low
rate, so no one business has an unfair economic advantage over
another. Because the rates are so low, it is easier for businesses
to assume the tax as a cost of doing business, as they would for
other costs, such as increases in rent, property taxes, labor and
all bills.
Similar to the tactics used when the governor pushed for and won
approval for an increase in the state's minimum wage, the Big
Business-sponsored ad attempts to scare the public into believing
that the gross receipts tax will harm the state's economy:
Myth: The ad claims that the gross receipts tax is a tax on
consumers.
Fact: There is nothing stopping businesses from raising
prices now. Businesses have to look at the market and decide how to
set prices so they can stay competitive. Under the gross receipts
tax, the marketplace will continue to dictate prices. The gross
receipts tax is a very low rate tax of 0.5 percent to 1.8 percent
applied to all transactions a business conducts in Illinois -- so
all businesses in the same sector are subject to the same rate.
Myth: The ad claims that the gross receipts tax will "suck
the lifeblood" out of Illinois communities.
Fact: By making corporations pay their fair share, the gross
receipts tax will enable the state to pump $10 billion into local
schools over the next four years and give every person in the state
access to affordable health care. Those are investments that will
set Illinois apart from its neighbors and rest of the country and
significantly improve the lives of people who live here. And in
Washington state, where the gross receipts tax has been in place for
decades, the state has outperformed rest of the nation in economic
growth consistently since 1980. In fact, some of the nation's most
successful businesses call Washington state home, including
Microsoft, Boeing, and Starbucks.
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 Myth: The ad claims the gross receipts tax will drive jobs
out of state.
Fact: No matter where a business is located, any business
that has transactions in Illinois' $1 trillion marketplace would pay
the low-rate gross receipts tax. It would be illogical to move away
from Illinois when the state provides one of the most vibrant and
competitive overall markets in the country. In addition, what Big
Business fails to point out is that all exports are exempt -- so
Illinois-based businesses that sell outside of the state are not
affected; and all businesses that have less than $1 million in gross
receipts are exempted -- which accounts for 75 percent of businesses
in the state.
Facts about Illinois' unfair tax system:
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Even though large corporations enjoy the benefit of state
services such as education, health care, roads, public safety and
public transportation, individual taxpayers carry 88 percent of the
burden of paying for them.
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The gross receipts tax will eliminate the inequities in our tax
system by ensuring that all businesses, not just some, pay for their
fair share of state services, while reducing the unfair burden
that's been placed on individuals over the last 30 years.
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During 2004 alone, 54 percent of the corporations that filed an
Illinois income tax return and made $257 billion in U.S. sales paid
no Illinois corporate income tax.
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On average, nearly half of the corporations that generated $50
million or more in annual Illinois sales paid no income tax between
1997 and 2004.
By adopting a tax system that is fairest for all businesses, and
not just some, the governor's Tax Fairness Plan will "Invest in
Illinois Families":
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Provide a record $10 billion in schools over the next four years
-- nearly three times more than any increase in state history.
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Launch Illinois Covered, an affordable, reliable health care plan
to cover the 1.4 million uninsured adults in Illinois and provide
assistance to millions of middle-income families and small
businesses struggling to keep up with health insurance costs.
"While the business community continues to resort to scare
tactics year after year, Governor Blagojevich has made great strides
through his first term to reprioritize Illinois government so that
it works on behalf of people," said John Filan, the governor's chief
operating officer. "This is another important and historic step, so
individuals and small businesses don't pay the ever-increasing share
of state taxes. The loopholes in Illinois' corporate tax system are
so pervasive that only a new system, the gross receipts tax, can fix
it. Individuals and small businesses alike will benefit from the
governor's Tax Fairness Plan, and the state will be able to make
critical investments in education and health care to benefit people
of all ages."
In recent weeks, the governor's Invest in Illinois Families
initiative has been endorsed by a growing list of statewide
supporters, including the Chicago Area Project and Illinois Council
of Area Projects, Illinois Federation of Teachers and the Illinois
Education Association, the AIDS Foundation of Chicago, and dozens of
African-American ministers. In addition, hundreds of health care and
education advocates and organizations, small-business owners, and
private individuals voiced their support for the governor's
Investing in Families plan at events in Alton, Chicago, Danville,
Decatur, DuQuoin, Peoria, Quincy, Rock Island and Rockford.
[Text from file received from
the
Illinois Office of
Communication and Information] |
