While it might not be such a problem for big businesses to absorb a proposed "Business Opportunity" tax - "for the privilege of doing business in the state" - small business owners could suffer the greatest.
The proposal would assess additional tax on businesses based upon their annual payroll. Businesses with payroll under $100,000 would pay $225; between $100,000 and $250,000 would pay $750; between $250,000 and $500,000 would pay $3,750; between $500,000 and $1.5 million would pay $7,500; and in excess of $1.5 million would pay $15,000.
State Sen. Kyle McCarter (R-Lebanon) said he has seen what high taxes have done to Illinois in the past and is astounded that several of his counterparts in the General Assembly are in favor of an amendment to a proposed beverage tax.
“It’s a bad bill, it’s bad for the people of Illinois,” McCarter said.
McCarter said he fears that if the bill passes, it will be a big burden for small businesses because even the smallest tier of the payroll tax would be higher than a current franchise tax that small businesses pay per year, which is $25.
“It’s nothing but an opportunity to pick people’s pockets,” said McCarter.
The bill has received support from both Democrats and Republicans who are seeking a solution to balance the budget, but McCarter is not enthusiastic about his counterparts in the state Senate being in favor of a bill that could cause businesses to leave the state, and his constituents, high and dry.
“This doesn’t fix the problem long-term,” said McCarter.
In prior occasions where high taxes were passed, he saw people move out of the state for a more affordable place to live despite having jobs that yielded a good income. This is something that McCarter doesn’t want to see happen again because it means less money going back into Illinois’ economy.
“We saw what happened last time,” said McCarter. “This is a huge mistake.”
The bill was introduced by State Sen. Toi Richardson (D-Chicago Heights) and was placed on the Senate calendar for a third reading last week.