By ROGER WALK, NEOGA

I am writing to express my opposition to the Governor’s proposed Gross Receipts Tax.

This is a hidden tax with a pyramiding scheme that taxes each level of production. The GRT will drive up the costs of goods and services in this state. Who will ultimately pay these higher prices? All consumers!

This tax is unfair to business and especially agriculture, due to the nature of our high volume and low margin business. With the current market prices for hogs and production costs, pork producers’ average profit margin is only $2.70 per pig. The GRT would reduce the already slim profit margins for producers by 25 percent! Farms that are structured as Sole Proprietorships, Limited Liability Corporations or Subchapter S Corporations will be taxed again on any profit that they might have left at the state tax rate of 3 percent. This is double taxation.

This tax will also drive up production costs for all farmers regardless of size because all agriculture inputs (feed, seed, fertilizer, machinery, etc.) are non exempt. As farmers, we can not pass along these increased costs by raising our prices for our commodities.

Farmers will also receive lower prices for their products because grain and livestock that is sold to in state elevators and packing plants will have to pass their portion of the GRT tax back to the farmer to compete with these same products from surrounding states that do not have this tax. This tax will hurt family farms like ours and put us at a huge competitive disadvantage to surrounding states.

The GRT does not treat all taxpayers equally since it is not based on the ability to pay the tax. I would have to pay this tax even in years when I would incur a loss.

This tax is a bad idea for the future of Illinois. As a father of four children I too am concerned about education for our children and health care for the uninsured. This plan is not the answer and will do much more harm than good as businesses leave for surrounding states. Farmers do not have the option to relocate. Please call your state legislators and urge them to oppose this Gross tax!

Published on Sunday, April 1, 2007 10:19 PM CDT
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