In a recent article in State Tax News (subscription required) abridged in a UIUC press release, tax expert J. Fred Giertz explains that under Blagojevich’s gross receipts tax proposal small businesses who pay outside lawyers, accountants, and janitors would be subject to the tax on those services–but big businesses with their own in-house lawyers, accountants, and janitors would not. The exemption for firms with $2 million or less in yearly sales does little good; it’s a loophole that would, for instance, allow “a four-partner law firm with annual receipts of $7.9 million” to escape the tax by becoming four independent practitioners sharing an office.
Best of Chicago voting is live now. Vote for your favorites »
For the record, Giertz did serve on Republican Jim Edgar’s transition team. But he also has fingered Edgar’s political godfather, James R. Thompson, as the original culprit in the state’s ongoing failure to properly fund state employee pensions: “Gov. Thompson and the General Assembly chose to direct available state resources to other state programs rather than to pensions” back in the 1980s, Giertz said in 2005. “This was not an oversight, but a conscious policy decision,” and an expensive one.
