“dem dry bones.
Oh the knee bone’s connected to the shin bone..”

One bone that’s going to be connected to the anal orifice of Illinois businessmen and farmers, is the Blago-bonehead 2% retail tax our Governor is attempting to get approved by the Illinois legislature. Otherwise known as a VAT or value-added tax, this little dip into our pockets is almost guaranteed to give Illinois the staggering economic growth of the Euro denominated economies. A more regressive tax on the economy is hard to imagine.

Farmers purchasing seed and fertilizer will pay a 0.2% tax on the total amount. Services like spraying get their own 1.8% retail tax. The farmers have to pay this tax, increasing their cost of goods. The elevators will collect it. Then, when the corn is sold back, another .2%. And when the elevators dry the corn – oh that is a service – 1.8%. And the trucking to haul the grain – 1.8%. So we have a 5.8% tax on a basic staple that goes into, say, the Fritos Corn Chips (.2% to the wholesaler, .2% to the retailer, .2% to the consumer, cumulative now is 6.4% on the corn), the beef feed lot supplies (another 2.2% here), and ethanol production. (Hmm I wonder whether the Federal Ethanol Subsidies get their .2% or maybe 1.8% if subsidizing a product is arguably a service). The current structure of the US economy makes use of a cascade of services. Very few operations are vertically integrated anymore. Whole new fields of study have been created to analyze suppy chain dymanics and optimization, and inflicting a VAT on each and every step has the ability to move the Illinois economy somehere south of Mississippi. And this doesn’t even address the hoards of IIRS agents that will be needed to value the commodity or product at each stage – corn pricing is a hugely dynamic market. At what value is the tax applied?

Any why is this tax necessary? To listen to the Democrats supporting Blagojevich, it is to fund Illinois pensions, curiously which were raided as a source of funds by these very same Democrats which are bemoaning the current underfunding; to support education, we presume public higher education, since K12 education in primarly funded through property taxes at the local level, and which wouldn’t need as much funding if the previous five years of maintenance funding hadn’t been diverted to social programs designed to get Blagojevich re-elected; and to fund universal healthcare for Illinois – a concept analyzed to death, and with the conclusion that government healthcare is the kiss of death for the consumer.

I can’t even be optimistic on this one. So bend over. Here com’ da Rod-bone.

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