Quinn could play Santa Claus by reforming state tax code
SPRINGFIELD – If Gov. Pat Quinn is looking to moonlight during the holiday season, he ought to consider becoming a gift wrapper at Sears.
After all, the governor promised the retail giant $150 million in subsidies within the last year. He might as well have tied it with a bow on top. Welcome to the goofy world of Illinois corporate welfare.
In 2011, the Legislature jacked up corporate income taxes by 46 percent, and before the year was out, it managed to give away a portion to – you guessed it – corporations.
A sweetheart deal with Sears Holding Corp. and CME Group Inc. managed to slice away a portion of the new revenues right off the top.
It’s a “government knows best” mindset that serves neither the taxpayer nor the economy well.
Folks on the left call it corporate welfare; on the right, they call it crony capitalism. Let’s just call it shameful behavior.
Instead of jacking up taxes on every business in the state and then trying to redistribute the wealth to favored corporations and constituencies, how about having a low tax rate for everyone?
It’s seldom talked about in the halls of the Statehouse, but Illinois has an abysmal environment for entrepreneurs.
The state ranks 48th in the country in generating jobs through the creation of new businesses, according to data collected between 1995 and 2009. And this was before the state increased the personal income tax rate by 67 percent and the corporate income tax rate by 46 percent.
Tax hikes are never good news for businesses. Money that could be plowed back into business to hire more employees, increase marketing or improve services instead is siphoned away to fund government.
Politicians love to dole out money to Fortune 500 companies because it makes them look like big shots. And big companies like to threaten to move so they can milk subsidies from government. But that leaves small businesses in the dust.
If you are big and powerful in Illinois, government anoints you a winner. If you are small business, on the other hand, it’s shut up and pay your taxes.
Starting a business is tough work. The risks are immense, but the benefits to the community can be even greater.
Small businesses are job-creation engines.
Not so long ago, outfits such as Dell Inc., Amazon.com Inc. and Microsoft Corp. were tiny startups. Now they are corporate giants.
Instead of paying big bucks to prop up or pay off established companies, why not grow our own Fortune 500 companies?
Cultivate the entrepreneurial soil with low taxes, fertilize it with less regulation and shelter it from excessive litigation.
A bountiful harvest of jobs is sure to follow.
• Scott Reeder is a veteran statehouse reporter and the journalist in residence at the Illinois Policy Institute. He can be reached at firstname.lastname@example.org.