Ready for tax fight, Blagojevich questions Jackson's opposition
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| Governor Rod Blagojevich visited Elgin on Monday afternoon to talk about a budget proposal that would benefit small business. Elgin was the second stop on a week long Investing in Families bus tour. Blagojevich spends some time talking to Elgin building owner Fred Steffen on Douglas Avenue. (Robert Winner photo) |
ELGIN (AP) — Gov. Rod Blagojevich said Monday he’s ready for “the fight of the century” over a massive new business tax, and he suggested critics such as the Rev. Jesse Jackson are responding to pressure from financial supporters.
“I just am dying to have this fight, because it is long overdue,” he said Monday as he began a four-day tour of the state to promote his plan.
The $7.6 billion tax would generate money for schools, health care and property tax relief. It has outraged many business owners, who predict it would force them to raise prices and cut jobs.
But Blagojevich says those predictions are a smoke screen to cover the business community’s real goal: raising income and sales taxes on working families.
“Hit the road,” he said to business groups. “We will not raise taxes on the working people of Illinois.”
The plan has other critics as well. Jackson and the Chicago Urban League question its impact on small, minority-owned businesses.
Blagojevich said in an interview with The Associated Press that Jackson has changed his tune since earlier this year. The governor said the two men talked then and Jackson “thought it was a fantastic idea.” Blagojevich said Jackson was “extremely excited” when he talked about his plans and corporations not paying their fair share.
“I think he’s getting calls from his contributors,” Blagojevich said, noting that he and lawmakers are getting the same pressure to “go easy on contributors and have an unfair tax system and screw your constituents.”
Jackson told the AP Monday that he and Blagojevich talked about the need for more health care and the problem of major companies paying little or nothing in income taxes but never discussed details of a tax plan. Jackson said his objections to the governor’s plan are not in response to any pressure.
“We’ve looked at the numbers, that’s all,” he said. Jackson said he is hearing from people who object to the plan purely on the merits.
“We who are his supporters are asking for a tax policy that will stimulate businesses, not eliminate them,” Jackson said.
The governor took a more conciliatory tone toward lawmakers who oppose his business tax and instead want to raise income and sales taxes while lowering property taxes. Blagojevich said it would be unrealistic to expect lawmakers to make an immediate switch from the long-discussed “tax swap.”
“We’re asking them to get off of an idea that they’ve supported for a long time,” Blagojevich told the AP.
The tax, the largest in Illinois history, would apply to almost all business transactions. Blagojevich recently has revised his proposal so it would generate $7.6 billion instead of $6.3 billion, with the additional money going to property tax relief.
Under his “gross receipts tax,” businesses selling merchandise would pay 0.85 percent on any money they take in. Service businesses would pay 1.95 percent. Business with less than $2 million in annual sales would be exempt.
The Chicago Democrat began a four-day tour of the state meant to rally support. He planned to visit Rockford, Peoria, Alton, Marion and other cities to highlight groups and businesses that he argues would benefit from his proposal.
Monday’s events included mingling with an invitation-only crowd at an Elgin restaurant and speaking at a Rockford woodworking business, DLM Manufacturing.
DLM is small enough to be exempt from the gross receipts tax, but could enroll in Blagojevich’s proposed program to offer low-cost health insurance for workers. Owner Duntai Mathews said private insurance companies want to charge him $6,200 a month to cover his employees, but the Blagojevich plan would do it for $2,800 a month.
Blagojevich says Illinois businesses don’t pay enough taxes and could absorb the new tax without passing it along to customers.
Most money raised by the tax would go toward improving schools and making sure everyone in the state has access to health insurance — two things Blagojevich says would help Illinois’ economy in the long run.
Blagojevich repeated his vow to veto any increase in the income or sales tax, even if the money would be used to achieve his goals of universal health care and better schools. He argued the taxpayer would end up getting those services but paying a bigger tax bill.
“So he’s basically running in place,” Blagojevich said. “We have not improved his life.”
Dyanna Chandler used the same logic to question Blagojevich’s plan.
The 59-year-old self-employed grant writer attended Blagojevich’s Rockford appearance because she needs health insurance and wanted to hear more about his plan. But she fears the new tax would increase her costs.
“Does that just filter down to me?” she asked. “Then I haven’t gained anything.”
