Tax to Pay for Health Plan in Illinois Faces Resistance

Illinois Governor Rod Blagojevich has been pushing a comprehensive health care plan that would insure everyone in his state, as well as provide wellness education and streamlined administration.  Blagojevich planned on funding the plan with taxes on gross business receipts.

Not everyone, though, is wild about Blagojevich’s healthcare plan.  And it gets a little interesting when that list of “not everyone” also includes the Rev. Jesse Jackson.

The issue, of course, is that tax on gross business receipts.  The proposed tax would apply to the gross receipts of businesses that make more than $2 million a year, and would range from 0.08 percent for businesses like retailers or wholesalers to 1.95 percent for service businesses.

The tax could generate more than $7 billion a year in net revenue.  And, according to Blagojevich, it would require big business to carry their share of the tax burden in Illinois.

“It would come through the small-business community like a tsunami,” Jackson has said in an interview. “For a substantial number of small businesses and many of our established businesses, the tax would be higher than the profit. That is the real problem with it.”

Some corporations, in protest, are considering leaving the area should the tax become real.  The Illinois Chamber of Commerce has begun a campaign against both the health care plan and the tax, and the state treasurer, Alexander Giannoulias, an early critic of the receipts tax, said his office had been receiving many complaints.