HR0344 95TH GENERAL ASSEMBLY

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HOUSE RESOLUTION

WHEREAS, We, the members of the Illinois House of Representatives, are bound by our constitutional oath to "provide for the health, safety and welfare of the people" of Illinois, and we recognize this can best be done by having the lowest possible tax burden and by maximizing the number and diversity of jobs and opportunities in Illinois, to make Illinois competitive, fiscally sound, and economically productive; and

WHEREAS, A free, stable, and growing economy, low tax rates, and low prices for Illinois consumers, leads to the creation of the maximum number of new Illinois jobs, whereas higher tax rates and higher prices of goods and services for Illinois consumers would actually destroy Illinois jobs; and

WHEREAS, There are essential public functions that are legitimately filled by government, which derives its just powers from the consent of the governed, including the power to tax the people of Illinois at the minimum rate necessary to fulfill these essential functions; and

WHEREAS, Whenever Illinois taxes are higher than the minimum needed to carry out essential public functions, that government is moving away from the health, safety, and welfare of the people of Illinois, no matter what the motivations are of the people that raise these taxes; and

WHEREAS, A proposed Gross Receipts Tax may soon be imposed upon all Illinois goods and services sold by the private sector within Illinois at a rate of up to 1.95%; and

WHEREAS, The proposed tax would be imposed upon all businesses regardless of whether they make a profit, and would fall most harshly upon start-ups, struggling firms, and small businesses; and

WHEREAS, This proposal is poor tax policy, criticized by economists and economic development experts across the nation as exactly the direction Illinois should not go if we hope to enjoy a growing economy; and

WHEREAS, This proposed Illinois Gross Receipts Tax, the highest gross receipts tax rate in the nation, would be imposed repeatedly upon the entire value of an Illinois good or service each time it changes hands as it moves through the economic process; and

WHEREAS, An example of this "pyramiding effect" can be seen in agriculture, Illinois' primary industry, where the seeds, the fertilizers, the farm chemicals, the machinery, and the elevator services used by an Illinois grain farmer are all scheduled to be taxed, and the full burden of all of these taxes would be borne by the farmer; and

WHEREAS, Inputs used by many other Illinois industries and professionals would also be taxed repeatedly under the "pyramid effect"; and

WHEREAS, Much of the cost of this new tax, if it is enacted, will be indirectly passed on to consumers of Illinois goods and services, thereby creating a significant increase in these costs and giving Illinoisans an incentive to buy elsewhere, thereby destroying more Illinois jobs; and

WHEREAS, The better-trained a worker is, and the more specialized the work that he or she does, the harsher the tax would be upon his or her workplace; and

WHEREAS, The proposed Illinois Gross Receipts Tax is precisely what a tax ought not to be in the modern economy, and, if implemented, it would have a destructive effect upon Illinois by repeatedly taxing specialized work and services; and

WHEREAS, Only five U.S. states currently have a gross receipts tax, and all of them levy this tax at a rate much lower than 1.95%, which would be by far the highest GRT tax rate in the nation; and

WHEREAS, Three of these five states use their (much lower) gross receipts taxes to replace their income tax or their sales tax, rather than trying to implement a gross receipts tax on top of these two other taxes; and

WHEREAS, The neighboring and comparable State of Indiana repealed its Gross Receipts Tax in 2002 for many reasons including those described here; and

WHEREAS, House members and motivated local citizens have held hearings throughout Illinois on the proposed Gross Receipts Tax, and testimony and comments have been gathered from a diverse variety of workers, consumers, farmers, and small businesspeople, and the vast majority of these Illinois citizens have told Springfield that they fervently oppose the proposed new tax; therefore, be it

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE NINETY-FIFTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we oppose the Gross Receipts Tax proposed by the Governor of Illinois; and be it further

RESOLVED, That a copy of this resolution be presented to the Governor of Illinois.