Monday, March 19, 2007

Some more on taxes....

Jack Lavin, director of the Illinois Department of Commerce and Economic Development via the PJ Star.
"While (small businesses) paid more, the wealthiest corporations in our state have paid less and less. Over 50 percent of (Illinois) corporations don't pay a dime of taxes," he said.

Well Jack, my first question is how many of those corporations were LLC's, since LLC's generally are treated as pass through organizations for tax purposes. That is the revenues are treated as income by the owners/shareholders and any earnings (after deductions) are treated as individual income for tax purposes. How many corporations are there in Illinois, what are the revenues on average (as reported to the state) of those that don't owe tax?

I guess the question I haven't heard an answer for is why these corporations are not paying any taxes. Is it due to things in Illinois tax law such as differences in how things can be deducted over federal tax law? Is it a rate thing? Is it fraud,? If the tax system doesn't work then why not fix the existing system. Don't create a new one. If your leg hurts you try and figure out what is wrong with your leg, not start walking on your hands.

The problem with any change be it a gross receipts tax or anything is companies can and will find a way around it. It could be getting the law modified to their advantage or becoming a host of entities that each take in less than 1 million dollars. I still think when all is said and done if this happens the biggest winners are not going to be school kids, but accountants, attorneys and lobbyists.


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