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I found it curious when the Illinois press release came across my desk announcing that one of the largest unions in the country came out and explicitly endorsed the Gross Receipts Tax (coverage here). It’s unusual for a union to come out and endorse any tax plan, much less one that is unprecedented in raising taxes on businesses. I believe this is true for mainly two reasons.

1. There’s no need for the unions to needlessly antagonize businesses
2. They’re afraid of the consequences if businesses cut costs to cover the increased tax burden

The union that endorsed the plan doesn’t have to worry about these issues, though. That’s because it is AFSCME, which covers municipal workers only. The obvious benefit to AFSCME is that increased government revenues generally means more government jobs which means more members for AFSCME.

However, in typical political fashion there is more than meets the eye here. I’ll just let newspaper stories from around the state tell the tale.

• The News-Gazette (Champaign) reports that Governor Blagojevich dropped a plan to lay off 203 Department of Corrections workers the day before AFSCME endorsed the plan. Guess who represents workers at the Department of Corrections?
• The Pantagraph (Bloomington-Normal) reports that AFSCME released a report that said that 2,000 more union workers should be hired by Illinois the day after endorsing the plan.

AFSCME and the Governor have not necessarily been friends since he was elected. Blagojevich has laid off workers, which obviously upset the union. The union has publicly blasted the Governor several times during his administration. All of a sudden they are chums who want to work together to pass a major tax increase?

The blog supporting the Illinois Gross Receipts Tax (coverage here) warns small businesses that they should be wary of new friends when it comes to taxes. Maybe taxpayers should heed the spin machine’s own warning?