* As we discussed yesterday, this was Bruce Rauner’s reaction to the national debate over corporate inversions…
Republican gubernatorial candidate Bruce Rauner blames the state’s business climate for Walgreens’ flirtation with Switzerland.
“America needs to compete, Illinois needs to compete. The right answer is not to create walls, to block companies and people,” Rauner said. “That’s terrible. We should be about freedom, choice and competition.”
* Gov. Pat Quinn lashed out…
‘For anybody running for public office in Illinois to endorse that kind of bad behavior, loopholes that are really taking advantage of the American taxpayer … we really have to say that candidate is way wrong, way off base,’ Quinn told reporters in Chicago. ‘A corporation renouncing its American citizenship to stash money overseas to avoid paying their fair share of taxes, that shifts the burden onto … everyday people who play by the rules.’
* And Rauner appeared to back away…
[Rauner’s] campaign wouldn’t say Wednesday if he supported or rejected the practice of companies reorganizing abroad.
* More…
Rauner spokesman Mike Schrimpf refused to clarify where Rauner stands on the issue of corporate tax avoidance.
But in an emailed statement he blamed Quinn for presiding over an uncompetetive economy.
“Bruce laid out a corporate welfare agenda that eliminates abuse of the tax code at the state level under Pat Quinn.” Schrimpf said. “He is hopeful that leaders in Washington can come together to craft comprehensive corporate tax reform that makes America more competitive and leads to more job creation.”
- Oswego Willy - Thursday, Jul 31, 14 @ 9:03 am:
===[Rauner’s] campaign wouldn’t say Wednesday if he supported or rejected the practice of companies reorganizing abroad.===
Hmmm.
===“He [Rauner] is hopeful that leaders in Washington can come together to craft comprehensive corporate tax reform that makes America more competitive and leads to more job creation.”===
I thought Bruce Rauner is a hands-on leader, who tackles problems that Springfield or Washington are afraid of?
It seems when Bruce steps “in it”, it takes a day to get the response, and it’s either a “double- down” or point to others to fix the “not my problem” … problem.
Stick to talking in Ads, or have “Slip and Sue” do all the talking…
- forwhatitsworth - Thursday, Jul 31, 14 @ 9:06 am:
I have to keep reminding myself that the only conscience a corporation has is the $/profit and NEVER has anything to do with morals or patriotism.
- North Shore Joe - Thursday, Jul 31, 14 @ 9:06 am:
Mr. Rauner appearing to support essentially what amounts to a corporation opening a Swiss bank account is, obviously, not a smart move.
No surprise he’s walking back. Too disciplined to get caught up in what is an irrelevant debate anyway.
- Peoria guy - Thursday, Jul 31, 14 @ 9:07 am:
Man, Rauner has sure turned into a politician quickly. He says a lot while saying absolutely nothing. This is not a good sign.
- Anonymous - Thursday, Jul 31, 14 @ 9:08 am:
Rauner simply forgot that he was no longer in the Republican primary. What he meant to say was, ‘I will unveil a plan soon to address this important issue. Please go back to talking about Pat Quinn. Chickens, unemployment, NRI, taxes.’
- train111 - Thursday, Jul 31, 14 @ 9:11 am:
I oftentimes wonder if paid spokespeople actually believe the tripe that they produce for the media.
To quote Pontius Pilate “What is truth?”
- Budget Watcher - Thursday, Jul 31, 14 @ 9:12 am:
Walgreens is looking to leave the county. This isn’t just an interstate competition to see which state lands the corporate headquarters. Kind of a stretch trying to pin this on Quinn.
- Anonymous - Thursday, Jul 31, 14 @ 9:13 am:
He didn’t listen the question carefully before launching into his stock talking points. He really stepped on his. Unforced error.
When “Fortune” magazine is calling out the inversion hustlers as unpatriotic, American politicians might want to give it a think before endorsing the dodge.
–“America needs to compete, Illinois needs to compete. The right answer is not to create walls, to block companies and people,” Rauner said. “That’s terrible. We should be about freedom, choice and competition.” –
Again, does that principle apply along the Rio Grande Valley? If the free movement of capital is sacrosanct, what about labor?
- lake county democrat - Thursday, Jul 31, 14 @ 9:14 am:
The GOP sounds really lame with the inversion issue - whether Americans believe corporate taxes should be higher or lower, nearly everyone thinks the government should be able to make that decision and not be forced into a “race to the bottom” with any foreign nation. If Rauner is smart he’ll say “this is an issue that needs to be dealt with at the federal level, balancing the needs of blah blah blah”
- DuPage Bard - Thursday, Jul 31, 14 @ 9:15 am:
Everyone relax, give Mr. Rauner 2 more days for the poll to come back and he’ll know where he stands.
- walker - Thursday, Jul 31, 14 @ 9:16 am:
Rauner box step.
Forward, side, back, side.
Check stance with partner.
- Sunshine - Thursday, Jul 31, 14 @ 9:17 am:
Actually Rauner makes a valid point. Create obstacles and companies will seek a better business climate. Remove obstacle’s and they will stay here and continue to build and grow.
We are no longer a state economy but a world economy. The finance people will find a way to maximize profits. That’s what they are paid to do. If we as a state put up road blocks, be prepared to see companies change direction….and location.
He needs to refine his message a bit and must realize being honest and candid might not always sell. He needs to continue to grow as a politician and talk in circles, supporting, but not appearing to support ideas. He needs to improve his ability to say one thing but mean something entirely different. Then again, he might just have that covered. Quinn certainly does.
- Toure's Latte - Thursday, Jul 31, 14 @ 9:21 am:
Rauner is Perry. Tiniest pebble and he trips sprawling.
The first sign Quinn will win any debate.
- Wensicia - Thursday, Jul 31, 14 @ 9:29 am:
It’s interesting the “I’ll run this state like a business!” candidate runs away from questions concerning business, his own or others.
- hisgirlfriday - Thursday, Jul 31, 14 @ 9:29 am:
Had to read that Schrimpf quote a couple times just to make sure I was reading his emailed(!!!) statement correctly.
Any answer to a question that begins “Bruce Rauner laid out a corporate welfare agenda…” puts Rauner right where Quinn wants him.
- RNUG - Thursday, Jul 31, 14 @ 9:30 am:
Slightly off topic but still somewhat to the point … I went and listened to Rauner at the RSEA meeting yesterday.
He has his stump speech down cold and he had it tailored to the audience. It all sounded good … then came the Q&A session (which was limited to pre-submitted questions read by the RSEA board). He made a number of obvious mis-statements on the Kanerva and SB0001 cases. (Thought Kanerva was settled; thought SB001 was at the ISC.Thought he could change pensions for existing workers going forward.) When pressed on the questions, it became crystal clear Rauner didn’t know the details and was probably less infomed than the typical drive-by commentator. I know we can’t all be subject experts, but you would have thought he would have been better briefed on those issues … especially since they will be blowing a big hole in the next govenor’s budget.
Anyway, that’s my thoughts on his being more of a big picture guy than a detail guy. And I have to admit he did a good job overall of syaing what the audience wanted to hear.
If I believed he actually meant what he was saying, I would vote for him …
- wordslinger - Thursday, Jul 31, 14 @ 9:30 am:
“The right answer is not to create walls, to block companies and people,” Rauner said. “That’s terrible. We should be about freedom, choice and competition.”
The guy says he has the right answer. I assume he means it and the principle he espouses applies to all things economic-related.
- Anonymous - Thursday, Jul 31, 14 @ 9:33 am:
I’m looking forward to the debates.
Unfortunately, there’s a lot of folks out there who sound like they are going to cast protest votes against the status quo, regardless of what Rauner actually stands for.
- zatoichi - Thursday, Jul 31, 14 @ 9:58 am:
I am sure Walgreen’s is moving to Switzerland specifically because of the Illinois financial/business climate. The fact their fed tax will go from 30%+ to about 20% while also getting about $16.5B (roughly 1/4 their business) in Medicare/Medicaid business might be slight PR issue. It’s all Quinn.
- Just a fact - Thursday, Jul 31, 14 @ 10:04 am:
Inversion costs are not loopholes but are instead valid costs of operating a business allowed under Sec 162 of the Internal Revenue Code. Taxes are based upon the net income of a Corporation not on some concocted jibberish created by grandstanding politicians. Illinois lost ABBV last week, Walgreens is talking about inversion, Olin recently moved a division out of state, State Farm bought a facility in Plano and many smaller companies are joining the exodus as well. The attitudes of most Illinoisans though is demonstrated in this blog. Raise Taxes, Companies wont leave because of the quality/intelligence of the Illinois workforce blah blah etc.Guess what? The theories are not working as tax paying companies continue to head for the door
- Demoralized - Thursday, Jul 31, 14 @ 10:14 am:
==The theories are not working as tax paying companies continue to head for the door==
They are moving because they don’t want to be tax paying companies. It’s hard to fix that. I’ve yet to see any plan from people other than to say Illinois taxes are too high. And? What is the alternative? Give me a percentage.
- wordslinger - Thursday, Jul 31, 14 @ 10:21 am:
–Illinois lost ABBV last week,–
Where’d they go? Same thousands of people at work today up in North Chicago, just like last week.
Whatever perverse pleasure you take in painting Illinois as an economic dystopia, the inversion dodge doesn’t fit the narrative. It’s a change-of-address scam, nobody goes anywhere.
- VanillaMan - Thursday, Jul 31, 14 @ 10:25 am:
OH STOP.
Walgreens merged with Boots, the largest drug store chain in Britain, and one of the largest in Europe. Walgreens is about as American now as Chrysler!
Walgreens isn’t moving to Switzerland because of Illinois taxes - it is moving to Switzerland because of international taxes and the fact that it is now an international corporation in Europe.
Rauner tried to make it a political football to throw at Quinn and Quinn was stupid enough to try and catch it.
Walgreens was gone the moment it merged. It outgrew Chicago.
Buh-bye!
- Demoralized - Thursday, Jul 31, 14 @ 10:30 am:
==“He is hopeful that leaders in Washington can come together to craft comprehensive corporate tax reform that makes America more competitive and leads to more job creation.”==
So it’s all Pat Quinn’s fault but Washington needs to fix it. Pick a lane.
- ChrisB - Thursday, Jul 31, 14 @ 10:40 am:
Funny, I just read an Economist article essentially agreeing with Rauner. This is a federal issue though, not much the state can do about it.
The problem is the federal corporate tax rate. Out of the top 35 riches nations in the world, the US is the only one that taxes income made in foreign nations. As a result, cash just sits in foreign subsidiaries until the next tax amnesty is declared. That’s cash that can be used to reinvest in the company and create jobs. Here’s another tidbit from the article; the US also raises less than the average of the other OECD countries.
Protectionist policies are a bandaid on a broken femur. Lower taxes, eliminate loopholes, and everyone will be better off.
http://www.economist.com/news/leaders/21608751-restricting-companies-moving-abroad-no-substitute-corporate-tax-reform-how-stop
- wordslinger - Thursday, Jul 31, 14 @ 10:45 am:
Walgreens will still run its 8,000 U.S. stores from Lake Cook and Wilmot Roads. Those 5,000-plus employees aren’t going to Switzerland, just like the Abbvie and Aon peeps didn’t go to London. It’s just a federal tax dodge.
Half of the publicly traded corporations in the United States incorporated in Delaware and are, technically, “Delaware” companies. But Wilmington isn’t the Loop or Manhattan.
- walker - Thursday, Jul 31, 14 @ 10:45 am:
Rauner made a stupid mistake, and he and his campaign know it. They already walked it back.
He had a generic talking point attacking Quinn, that he remembers to say every time an economic topic is raised, which had nothing to do with the question at hand.
For the Believers to try to say otherwise, is to lag behind the class.
For those who parrot the recently spread talking point that this is not about lowering US taxes on US operations and earnings, just don’t know how international companies can operate financially.
But VMan has it right, Walgreens’ move is as much about their recent mergers, as about US taxes. Illinois has nothing to do with it.
- walker - Thursday, Jul 31, 14 @ 11:03 am:
Some movements of “company operations” to avoid taxes and regulations are primarily legal filings, followed by some computer changes, e.g. insurance to Bermuda, banking to Lichtenstein, oil trading to Switzerland, and they often don’t even require more than one company employee or agent, or more than one office, in those locations. The smart CFOs recommend such options to maximize profitability. The best CEOs ignore them, because they have a better perspective on corporate health, multiple stakeholders, and a broader mission. Penny wise and pound foolish.
- Sue - Thursday, Jul 31, 14 @ 11:16 am:
Can any of you wasting time whining about this issue tell me how either Gov Quinn or soon to be Gov Rauner can have any impact on this IRS issue- I would love to know what I am missing– LOL
- lake county democrat - Thursday, Jul 31, 14 @ 11:20 am:
It’s a federal issue, but is it “just” a federal tax dodge? Doesn’t Illinois tax Walgreens’ earnings too?
- Rich Miller - Thursday, Jul 31, 14 @ 11:24 am:
===Doesn’t Illinois tax Walgreens’ earnings too? ===
In Illinois, yes.
- A guy... - Thursday, Jul 31, 14 @ 11:37 am:
It’s a Fed issue. Can be easily twisted around though,(what’s new?) If Walgreens decides to start issuing their own rationale on this, it could be interesting. Not sure if this goes beyond issue du jour, or issue du week. We’ll see.
- Jimbo - Thursday, Jul 31, 14 @ 11:44 am:
Ad Governor, Quinn reduced Walgreens federal tax burden.
. The increase was a deductable expense.
On a serious note, this isn’t a State issue. Neither Quinn nor Rauner will have any kind of power to stop this corporate behavior other than join many who will choose to shop at CVS after this. Next issue folks.
- wordslinger - Thursday, Jul 31, 14 @ 11:54 am:
Rauner chose to address the issue the way he did. He’s a big boy and can speak for himself.
- A guy... - Thursday, Jul 31, 14 @ 11:59 am:
== wordslinger - Thursday, Jul 31, 14 @ 11:54 am:
Rauner chose to address the issue the way he did. He’s a big boy and can speak for himself.===
True enough Slinger. Ironically, less people would ask Quinn how a successful business should react. How in the world would he know?
- Norseman - Thursday, Jul 31, 14 @ 12:06 pm:
RNUG, it’s partially staff’s fault. They need to do a better briefing. The Kanerva confusion is somewhat understandable given the lack of instructions to the circuit court, but the SB 1 mistake is bad staff work.
- Anotherretiree - Thursday, Jul 31, 14 @ 12:16 pm:
2+ million men and women have volunteered to fight in two(foolish) wars since 2001. The “Job creators”/”successful earners”/”soylent corporate people” response is…”thanks you for your service…but we’d rather hire Chinese to make our Iphones and BTW..we’re outta here “..corporations are people…..who worship dollars as Jesus intended.
RNUG was spot on about the RESA meeting (as usual). Rauner was smooth, but surprisingly uninformed. I wanted to ask about the switch to 401K blowing a big hole in the pension since all new money would stop flowing. My fav moment was when the moved us to hide the empty seats.
- How Ironic - Thursday, Jul 31, 14 @ 12:20 pm:
@ A Guy “Ironically, less people would ask Quinn how a successful business should react. How in the world would he know?”
Good question. I suppose Rauner would respond “The success of a nursing home investment is directly proportional to the number of patients that expired due to cost cutting measures implemented to pump up profits before collapsing upon itself”?
- Marty - Thursday, Jul 31, 14 @ 12:28 pm:
RNUG, I was not able to attend Rauner’s meeting with the RSEA yesterday so maybe he addressed this clearly. Does he believe that future 3% AAI’s (COLA’s) for current retirees are 1) protected benefits previously earned or 2) future benefits and thus subject to revision like his misguided opinion regarding current employee’s benefits or 3) no opinion, will let the Supremes decide.
- wordslinger - Thursday, Jul 31, 14 @ 12:39 pm:
–He made a number of obvious mis-statements on the Kanerva and SB0001 cases. (Thought Kanerva was settled; thought SB001 was at the ISC.Thought he could change pensions for existing workers going forward.) When pressed on the questions, it became crystal clear Rauner didn’t know the details and was probably less infomed than the typical drive-by commentator.–
Like he said, he’s a salesman. Still, you’d think if you want to sit the Big Chair, you’d have a little more curiosity as to what you’re getting yourself into.
- MrJM - Thursday, Jul 31, 14 @ 1:00 pm:
“Rauner spokesman Mike Schrimpf refused to clarify where Rauner stands on the issue of”
Journalists covering this race would be wise to make a macro for that phrase.
– MrJM
- JS Mill - Thursday, Jul 31, 14 @ 1:41 pm:
=RNUG- He has his stump speech down cold and he had it tailored to the audience.=
This is something noted early in his campaign and some thought it would be his undoing- different answers for different crowds- but so far not a dent.
The Walgreens issue is not a state issue. Rich addressed work/comp in another blog and that is the key to a better Illinois business climate, not tax give-a ways to corporations.
- Peoria guy - Thursday, Jul 31, 14 @ 2:05 pm:
Agree. Work comp by far is the biggest issue facing Illinois businesses. Nothing even close.
- nothing to see here - Thursday, Jul 31, 14 @ 2:41 pm:
I’d be willing to bet a little the Bruce has some past business dealings with inversion that makes this difficult for him to comment on.
- RNUG - Thursday, Jul 31, 14 @ 3:13 pm:
Norseman,
I know you had to leave before the meeting started. Did you make it back in time to catch part of it?
- Jimbo - Thursday, Jul 31, 14 @ 3:51 pm:
Nothing is onto something. I’m sure Bruce has used this method to decrease taxes on businesses in which he invested. Maybe that’s why Quinn is harping on it. This issue can get a lot of folks angry. Once their angry about Walgreens, threatening boycots etc., some ads could come out highlighting Rauner doing similar things to avoid corporate taxes.
I think that might be too brilliant for team Quinn though, it’s more likely they think he needs to go even more full bore populist to get votes. Still, it would be ever so sweet if it was something more. You don’t get as rich as Bruce without doing some fairly unsavory things. I’d bet those things aren’t limited to killing granny by running homes on the cheap.
- Demoralized - Thursday, Jul 31, 14 @ 4:03 pm:
==Bruce laid out a corporate welfare agenda==
Did he really mean to say that? Corporate welfare? I’m not sure that’s a good agenda to have.
- Norseman - Thursday, Jul 31, 14 @ 4:04 pm:
RNUG, no that’s why I appreciated your synopsis.
- Yellow Dog Democrat - Thursday, Jul 31, 14 @ 8:00 pm:
I will bet that work comp isn’t even close to being the #1 issue facing Illinois businesses.
The number one issue is the quality of our public schools or lack there of.
Without quality schools, you can neither build, attract nor retain a quality work force.
- RNUG - Thursday, Jul 31, 14 @ 8:20 pm:
YDD,
I agree. And that’s why you’ve seen me suggest increased funding for K-12, even if it comes at the expense of college funding. Once you get K-12 producing good results, then you can start spending on the colleges to enhance that result.
- JS Mill - Thursday, Jul 31, 14 @ 9:20 pm:
=Yellow Dog+ Not sure where you are going with the “The number one issue is the quality of our public schools or lack there of.” Illinois schools are good. We have an educated work force with fewer job opportunities than a half generation ago. Take out the high-poverty urban schools and you get a vastly different picture. Illinois is one of 8 states (at last look, may have changed) that require every student to take the ACT. We continue to score above the national average. That is not easy to accomplish. The education system is not broken, but families sure are.