Governor Blagojevich: Meet Economics 101

In his State of the State Address on Wednesday, Illinois Governor Rod Blagojevich put forth a tax increase to fund higher spending on children's health and education, which included the imposing of a gross receipts tax on the state (See blog post below). Regardless of how high the governor may want to increase spending (even if he wanted to triple it), a gross receipts tax is the one of the worst ways to raise the revenue for that spending.

In his presentation, the governor tried to dismiss other alternatives. Specifically, here is what he said regarding three other revenue-raising options, and where he is wrong.