Monday, April 23, 2007

Plans to hide the cost of the Gross Receipts Tax

Before I have talked about how most of the cost of the Gross Receipts tax will be passed on to consumers in the from of higher prices, it seems that Governor Blagojevich is well aware of this because hidden in his proposed bill is a passage that would make it illegal for business to place the cost of the tax on an bill to their costumers. While there are of course numerous federal, state and local taxes and regulation are passed on to the consumer in the form of higher prices for goods and services that are not itemized and presented to the consumer but are hidden, this is the first time that I know of that a bill would explicit make it illegal for a business to tell a consumer how much of the cost of good is the product of a specific tax. It would be the same as if the governments forbid telecoms or utilities from putting on their bills how much was being paid because of taxes. I don’t think that business would itemize their bills enough to include the Gross Receipts tax either way, it would just show as higher prices, but why would the Governor want to make it illegal for business to give their costumers more information?

The reason is pretty simple, Governor Blagojevich realizes that in order for the Gross Receipts tax to have any chance to pass the State General Assembly he has to play up the populist rhetoric of it not being a tax on the general public but one on “greedy selfish” business that don’t want to pay their fair share to the state. No State Representive or State Senator in district that they have any chance of facing serious competition in, is going to want to vote for a 7 billion, if the public knows that they are going to paying for most of it. They don’t want that on record when they are up for re-election, nor does Governor Blagojevich, particularly if the rumors are true that he plans to run for a third term in 2010. That why you this is hidden in the bill and you don’t see any of the Governor’s supports wanting to talk about the effects of the Gross Receipts tax will have on the economy and why the only people a loud to talk before the State Senate are supports of the Governor’s bill. If the Governor really thinks that his programs will significant benefits for the state, then so be it, tell the public that, but also tell them that they will be paying the cost of most of the Gross Receipts tax and be up front about its negative effects on the State’s economy. Let the chips fall were they may.

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