Funny thing happens when I talk to real folks about Gov. Rod Blagojevich's plan to impose a new gross receipts tax. They don't seem to mind. In fact, they appear mildly in favor of the plan, mostly because it offers the prospect of helping them get more affordable health care insurance.
This reaction is in stark contrast to most of the business community, which has been going absolutely bats over the governor's proposed tax hike, which taxes business revenues instead of earnings. The Illinois Manufacturers' Association, whose leader Gregory Baise is at the forefront of the opposition, and other interest groups contend this tax would demolish Illinois' business climate. Pass this tax on corporate revenues and companies will respond by firing workers, going into bankruptcy or passing higher costs on to consumers.
Sounds pretty awful, doesn't it?
Normally, when it comes to money issues my inclination is to give the private sector the benefit of the doubt and yield to my free market instincts. In this case, however, I'm leaning toward the governor's idea and ready to tell business to suck it up.
Why? Because I have yet to hear an alternative plan coming from any of these outraged corporate types about what we must do to help solve the health care insurance crisis in Illinois (not to mention the rest of the country).
Any individual or small business owner knows that escalating health care insurance is breaking their backs. Millions of people are forced to pay criminally high monthly premiums just to get basic coverage.
Business owners, of all sizes and stripes, have seen their employee medical costs zoom in the last decade --jumping eight to 15 percent annually, depending on the year. Starbucks spends more on worker health care than it does on buying coffee. General Motors pays out more for worker insurance than it does for steel! Small business owners struggle to offer coverage but increasingly give up the ghost.
And even if you're a sole proprietor and don't have a single employee, your insurance coverage is a huge monthly nut--try about $1,400 for a business owner with a small family. Ouch! That's more than alot of mortgage payments.
Has Corporate Illinois stepped up to the plate to help solve this problem? Not to my eye.
I have been in meetings with CEOs who openly lament rising health care costs but are at a loss for how to solve the problem. Instead, business chiefs toss up their hands and blame changing demographics ("People are just living longer, you know") or expensive new treatments ("People want to have the latest medicines and procedures, you know.")
Yeah, we know.
What we're also learning is that the growing number of uninsured people is raising everybody's medical insurance costs. If you can't pay, then I have to pick up your share. Times that dynamic by tens of millions and you realize that society is already being handed the check for this tremendous insurance shortfall.
One other thing: Let's say Illinois' gross receipts tax goes up one or two percent annually but it helps drive down individual or employer health care insurance increases, or perhaps reverses them slightly. Isn't that a worthwhile trade-off?
Sure, you can argue about the details of Blagojevich's tax plan. It may be too high or it should be linked to property tax relief. For my part, I want an iron-clad agreement that the money collected from this tax goes directly into providing health care insurance coverage (and education) and not into a bunch of other feather-bedding initiatives that are an Illinois specialty.
More than that, if business hates the governor's idea so much, then let's hear a realistic plan for covering the state's uninsured and for lowering medical insurance costs. On that score, business' silence has been deafening.
Instead, the state's corporate players prefer digging in and just screaming "no way".
They may not realize it but this is a dangerous approach. Illinois' business elite, who I guarantee enjoy some very nice company-paid insurance coverage, needs to be aware of that risk.
The fact is a growing number of the state's middle-class--which comprise the majority of Illinois companies' employees, vendors and customers--are getting clobbered by constantly rising health care insurance costs and that hurts the business environment more than taxes.
We are rapidly approaching a tipping point on the health care insurance crisis. Gov. Blagojevich was re-elected on a wave of populist sentiment and he has a feel for issues that connect with an increasingly stretched and fearful middle-class.
Affordable health care coverage is at the top of their list.
Blagojevich has a plan. Where's business?