A commenter left a comment that was thoughtful, but I’d argue wrong on the GRT post:
“large out of state retailers are benefited by the GRT at the expense of small, local businesses”
This is incorrect. I would say that the GRT actually impacts those out of state more – since they are the ones who are able to get away with paying nothing.
I think the biggest impact this will have is on those companies that are based out of state but sell to people in Illinois. They can hide their income (and have been), but not their sales.
Additionally, when you take healthcare into the calculation – that is something that actually affects a businesses’ bottom line. You cannot exclude that when making calculations on how it will affect them.
A businesses with 20 employees that can save $50,000 per year on their health insurance costs isn’t going to give a damn about $5,000 in taxes.
His point isn’t invalid, but I think it misses the point of what I was saying and what the report was saying about the pyramid:
No, there is only one transaction for them with the tax in place. So if they are selling pork from Iowa, the only tax is upon the sale in Illinois. If, however, we are talking about pork raised here, slaughtered here, processed here, goes to a distributor here, is then sold to a market here and then sold to a consumer in Illinois the tax is payed 5 times. That’s the point of the pyramid structure of the tax. Out of state companies are advantaged because they don’t have the same costs of the tax if the pork is all, but sold to the consumer elsewhere.
In that case, the tax hits twice–the sale from the distributor to the market and the market to the consumer.
Actually, the group that this will have the greatest impact on is companies who provide services, and particularly partnerships.
Partnerships providing services pay only a 1% partnership income tax (well, in addition to the personal income tax that everyone pays. They pay no sales tax and no corporate income tax.