12 Reasons Why the GRT Won’t Drive Business Out of Illinois
The total bite from taxes and fees in Illinois will still be lower than half of the other states. We have the lowest burden of all of our surrounding states, and with the GRT will have the second lowest burden.
Affordable health insurance coverage will make Illinois a more attractive place to live, work and run a business.
Health insurance costs to businesses will be reduced.
With the State assuming a larger role in the funding of schools, the pressures to increase property taxes will be reduced.
The economy of the state of Washington, which has had a GRT for many years at rates similar to those proposed in Illinois, consistently out performs the national economy.
Job growth in Washington last year increased 60 percent faster than in the country as a whole.
The GRT spreads the tax burden more evenly across all business sectors, reducing the upward tax pressure on businesses that pay existing taxes.
The three states that have had a GRT for a number of years, Delaware, Washington and Hawaii, are ranked respectively 9th, 11th, and 24th by the Tax Foundation in its 2007 State Business Tax Climate Index.
In a Washington State Survey, only 8 percent of businesses said that the state’s tax system “had a negative effect on the ability to conduct business.”
A year after the GRT went into effect in Ohio, the Ohio Business Roundtable said, “Unlike the old business taxes, this new tax does not penalize job creation and investment, and also encourages participation in the global marketplace.”
The Texas Association of Manufacturers endorsed the adoption of a GRT in that state, calling the GRT, “a more broad-based, low rate tax structure that is reasonable and taps into the diverse business economy of Texas – ensuring that all businesses do their part in funding education for the future workforce of our state.”
There is no evidence that business is leaving Washington, Delaware, Hawaii, Ohio, Texas, Kentucky, New Mexico, or Arizona, all states that have some form of a gross receipts tax.
13 comments:
You are aware that Washington state has no income tax? Repeal my state income tax and you have my support of the GRT.
Also, no Illinois business employs anywhere close to the number of Boeing. Drop an employer like Boeing into Illinois, with its near guaranteed employment base, and business will thrive here too.
"With the State assuming a larger role in the funding of schools, the pressures to increase property taxes will be reduced"
This my favorite reason. So to get lower taxes, we need to raise taxes, on the odd chance that some government entity will agree to take a hit on their appropriations. Makes perfect sense.
JBP
There are like no numbers in this post, and no links. "Health insurance costs to businesses will be reduced." That's not a reason, it's just a claim.
If you like the damned regressive GRT so much, you can hop on the next bus leaving for one of those states you mentioned. I think Greyhound has a bus leving chicago for Cleveland at mignight each evening... be on it!
Well, I can see that Kane needs a geography lesson. Bad call on using the state of Washington as a good example of where GRT works. Unlike Illinois, which 5 states border, Washington only has two other states to compete against (Idaho and Oregon). That's why it works for them!
Here is one folding up shop. High costs (and GRT would be a cost) and sugar tariffs.... that's what high taxes and protectionism does for you.
Aside from the fact that Doug Kane is raping the taxpayers for more than $50,000, here are counter points.
1. Washington has the 3rd highest rate of business failure - a fact linked directly to their GRT according to the US Small Business Administration.
2. The Supreme Court has ruled in other cases that states CANNOT collect on these "out of state" sales (i.e. farmber buying combine from Missouri). Therefore, Illinois businesses like car dealers and suppliers will be unfavorably disadvantaged.
3. While the Governor claims that 85 percent of small busines is exempt, statistics show that 85 percent of all Illinois employees work for the companies that will be impacted.
4. Senate President Emil Jones, Lt. Gov. Pat Quinn, Treasurer Alexi Giannoulias, and Comptroller Dan Hynes all AGREE - the GRT will unfairly hit consumers and businesses.
I could go on all day and I am not being paid for this editorial.
You should probably also look at the Manufacturing base of a state like WA as compared to IL.
Businesses are already not expanding and creating more jobs in IL, just because of the threat of the GRT.
Oh no! people are making profits - tax tax tax!!
Sorry, I do not recognize your name Mr. Douglas Kane. What are your bona fides, please. You really fail to make the case.
Indiana and Wisconsin -- and Missouri have all spoken out in favor of an Illinois GRT as well.
For whom do you work?
4%,
If you can't argue based on fact, you just lie. Go buy a car out of state and then try to license it in Illinois. See what happens.
Sen. Emil Jones is the chief backer of GRT in the GA. Where do you think your lousy 4% came from anyway...and why are you blogging instead of working?
It's true that Washington State has 8% higher business failures than the national average. It also has 8% more business start-ups -- so it seems that the ratio of failures to start-ups matches the national average.
My credentials: PhD in economics and a history of consulting on tax policy issues.
Mr. Kane,
Thanks for the bona fides.
Now, let's forget the brainless pabulum about how the GRT will lower property taxes or how "there isn't any business that would leave IL if it passes."
If you have a Ph.D., then you know that most of this economic activity we are debating happens at the margins.
My wife's company probably won't leave IL, but with $8.5 million more in taxes, they aren't going to hire as many people, pay better benefits, nor invest in new product or services.
Further, if sqeezed, they will let people go, and these are nearly always the newest or most expensive employees. Why insult the intelligence of thinking people by attempting to ignore these things?
___
The other item that galls people about this proposal (as well as HB750) is that it is promoted with the same outright lie that "there is nothing that can be cut."
We know that the legislature has the power to ram this crud through, just as we know that there isn't a Republican who will argue for necessary cuts in spending and waste in State Payroll (and yes, education bloat is STATE PAYROLL) and perks.
Steven Malanga (Author - The New New Left) writes eloquently about how the entire infrastructure of many governments are wholly owned subsidiaries of what he call "tax eaters."
Your patrons have the power, and the "taxpayers" have no voice compared to the voracious greed of the "tax eaters."
I guess we'd just appreciate a little honesty. Why not just say "sure we could cut waste, featherbedding, and pension abuse, but we don't want to and we have the clout.
It would be refreshing to hear the truth instead of the steady stream of lies about how there is no where to cut.
The automobile retail business in Illinois will surely see a minimum of 40% - 50% reduction in the ranks of its dealer body. Currently an automobile dealer operates on a margin of 1 1/2% - 2% return on sales if they have the right franchise (Toyota, Honda or Nissan), if he or she doesn't, they are doing all they can do to just break-even. The average new car franchised dealer creates $28,500,000 in gross sales. If you do the math, you will find that this tax will create more than $250,000 tax burden. Now I know that it's hard to feel sorry for a "car dealer", but lets remember that the average car dealer employs 45 - 50 people supporting their families on the paycheck that that "car dealer" pays them every week. That same "car dealer" has invested millions in his or her building and property. The average city in Illinois houses 4-6 new "car dealers" half will go away. Now we have an unemployment problem and a commercial property problem. This is just the tip of the iceberg on this issue...I am only touching the things that will surely occur within the first year. As time goes on, the City economies will feel the strain based on the fact that the automobile dealer body is in most cases the largest single revenue generator for it's cities, creating a shortage in services offered by the city...police, fire, public works etc. The "FAT CATS" that the fair governor is referring to does not reside in the automobile business...but I can assure you that this proposal will in fact create the largest single blunder in Illinois History!
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