Tuesday, May 15, 2007

107-0: Illinois public health plan gets trounced

Via SDA:

Illinois Governor Rod Blagojevich proposed a McGuinty-style tax hike to pay for more socialized health care. At the time of his re-election he predicted his health plan would amount to the "fight of the century."

He planned to pay for the plan with a "gross receipts tax" on businesses. Similar to Saskatchewan's capital tax, a gross receipts tax taxes money from business whether they earn money or not because the tax is applied to total revenues, and not profit.

The Tax Foundation estimated that Mr. Blagojevich's proposal would have been the largest state tax hike in the last decade, as a share of state general fund revenue--at 27% nearly double the next closest, which was Nevada's 14% increase in 2004. In per capita terms, the tax hike would average about $550 per Illinois resident.

All of this piled on top of the $1.5 billion in new taxes and fees that the Governor imposed in his first term. State revenue has been rising at a respectable 5% annual pace, but spending is rising faster. Jonathan Williams of the Tax Foundation says the Governor's proposed budget this year calls for a 13.2% spending increase, which comes on top of a near double digit increase a year ago. The cumulative impact of this rising tax and spending burden has been to drive businesses out of the state.
The Governor claimed this would prevent the corporate fat cats from avoiding payment.

Everyone bailed out on this plan -- including Rev. Jesse Jackson in one of his famous incomprehensible quotes:
"We all want health care. But business closer is not good health."

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