Question of the day
Wednesday, Oct 2, 2013
* From the Illinois Policy Institute…
As we learned yesterday, ADM pays next to no state income tax. That’s why it wants an EDGE tax credit. Lowering the company’s tax rate wouldn’t provide ADM with the money it wants to locate its new world headquarters and tech center in Chicago.
* I don’t like these “incentives” much, particularly when it involves moving a company from one part of Illinois to another.
But we need to focus on facts and not simple-minded ideology as this debate goes forward - and it will go forward. The state tax rate means little to nothing to ADM.
Zurich North America explained to the House Revenue Committee yesterday that insurance companies don’t pay corporate income taxes. They pay a different sort of tax. ZNA wants an EDGE credit to move its headquarters less than a mile within Schaumburg to a TIF district.
The tax rate did, however, mean something to CME, which loudly threatened to pull out of Chicago. But even there, the story I’m told is that some complicated tax changes took effect without CME taking notice and its tax burden went way up.
* The other easy way out is the liberal perspective that this “corporate welfare” must absolutely end. Yet, for the most part, we hear nothing about truly reforming workers’ comp laws from that crowd - and workers’ comp costs are far more likely to send companies to other states than corporate taxes.
* And while the two extremes debate, Texas, Florida, Indiana, Wisconsin, etc. are all trying to poach our companies. Maybe you don’t care. But we need jobs here, man. And considering our national reputation - even though some of it is undeserved - it’s crystal clear that business execs ain’t keen on coming here and/or expanding here without some state help.
* Almost never mentioned is our low entrepreneurial rate here. We have a climate that simply doesn’t encourage innovative startups, unless those startup folks have some insider knowledge or help. As just one example, restaurants in Chicago have such a powerful lobby that the city had to impose ridiculous limits on food trucks. The overly restrictive medical marijuana law is another. We’re just too afraid of change.
* What we need is a sane, rational, but innovative tax and regulatory system here.
The fracking law shows that this is possible. All sides came together and we should soon be reaping the benefits.
So, it can be done. But we need real leadership at the top which can convince the entrenched interests on all sides that we all benefit when we open the door to innovation.
I don’t advocate following the Texas model. We need our own.
* Instead of a question today, how about we talk about things we’ve seen that are messed up and how we can fix them.