Jackson says new tax plan will hurt small business

Friday, April 06, 2007

Business owners who oppose Governor Rod Blagojevich's proposed business tax have a new ally Friday, the Reverend Jesse Jackson. Jackson joined small business owners who say the tax would put them out of business.

The governor claims that most of the new tax on business revenues would be paid by big corporations that don't pay their fair share now, and the money, billions of dollars a year, would go to good causes, education and health care. But a coalition of small business owners, led by Reverend Jackson, says the tax will hit them, too, and for some it will be a death blow.

"This tax would basically put us into bankruptcy," said Margaret Carlson, contractor and builder.

Margaret Carlson managed construction of the first Wal-Mart store in Chicago. But she says that her company can't survive the governor's tax on business revenues.

The publisher of N'Digo, the city's largest independent weekly, has the same fear.

"This tax represents the death of an entrepreneur," said Hermeme Hartman, N'Digo publisher.

For example, a small business with revenues of $3 million a year and a profit of $200,000 now pays about $9,400 in the state's corporate income tax. But under the governor's gross receipts tax that would skyrocket to more than $25,000 and as much as $58,000, depending on whether the business provides goods or services, and that's why Reverend Jesse Jackson, the Rainbow/Push activist., is formally rejecting the governor's plan on behalf of several hundred small business owners.

"Some of our more significant businesses could not survive this tax," said Reverend Jesse Jackson, Rainbow/Push president.

"Eighty-five percent of businesses are exempt, including virtually all small businesses in the state," said Sheila Nix, governor's chief of staff.

The governor and his family toured the state on a bus this week to lobby for the plan, arguing that it is aimed at big corporations that don't pay their fair share of taxes now and the handful of small businesses that aren't exempt would get a host of other benefits and tax breaks to minimize the impact.

"When they do the calculations, and take a look and understand all the components of it, they may find that it's beneficial to them," Nix said.

"A start would be a graduated tax plan based upon the ability to pay and size as opposed to a flat tax," said Rev. Jackson.

The Blagojevich administration says when Jackson and the other critics weigh all of the factors, they will get on board, like the black and Hispanic chambers of commerce have. The governor is obviously playing hardball. But so far he is got a lot more strikeouts than hits in a game that still has nearly two months to play down in Springfield.

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