* According to Speaker Madigan’s spokesman, this op-ed “will be an element of the remarks the Speaker plans to deliver at the start of the 100th General Assembly later today in Springfield.” One of Madigan’s featured proposal here is a retread from 2014, when he also proposed cutting the corporate tax rate in half. And the House already voted yesterday to extend the EDGE tax credit for a few months. The stuff about not giving any special incentives to companies that export jobs to other countries may be new.
The last two years have been extremely difficult for our state. But with the inauguration of a new General Assembly today, we have an opportunity for a new way forward. Regardless of how any of us feel about the proposals laid out by Gov. Bruce Rauner, the elected leaders of our state must face Illinois’ challenges together. Rather than placing blame and looking to find the worst in each other, we should focus on working together and finding common ground to address the issues facing our state.
In that spirit, I think we can all agree that legislators and the governor must take immediate action to address the state’s budget crisis. There are people across Illinois whose lives are forever altered in a negative way because of our lack of a budget. If we have a repeat of the last two years, there will be more people forever harmed across our state. We can all agree that can’t happen.
House Democrats agree with the governor that Illinois can and should improve our business climate. Improving our business climate will create new opportunities for families across Illinois and will provide a better standard of living for many of our state’s residents.
But House Democrats don’t agree that the only way to create jobs is to hurt the people who work in those jobs each day. I would like to suggest a better approach for improving our business climate than those who insist the only way to compete in a global economy is to join in a race to the bottom by cutting wages, and stripping away protections for workers in an effort to increase profits for businesses.
Crain’s Chicago Business columnist Joe Cahill recently studied Donald Trump and Mike Pence’s efforts to prevent the Carrier Corp. from outsourcing jobs from Indiana to Mexico. By committing $7 million in taxpayer incentives, they were able to keep one-third of the jobs in Indiana, but two-thirds of those jobs are still going to Mexico. No state in this country will ever offer lower labor costs than Mexico, which is why Mr. Cahill concluded that our economic development strategy cannot focus solely on costs, but must offer businesses the opportunity for growth.
The attributes that drive economic growth can be found right here in Illinois: We have first-class universities and nationally recognized research labs. We have a highly educated workforce. We have a world-class transportation infrastructure. We are home to innovative projects like Chicago’s digital manufacturing initiative.
To this end, House Democrats will introduce and pursue an agenda that contains aggressive economic reforms to leverage these attributes, create jobs and improve the business climate, without hurting hard-working middle-class families.
If we must use a cost approach to helping businesses in Illinois, we could start by cutting the corporate income tax by at least 50 percent. This would allow businesses to spend more of their resources on creating jobs and improving our economy. However, many of the largest corporations in Illinois pay no income tax, putting the real economic drivers - small and medium-sized employers who do pay - at a tremendous disadvantage. If we cut the income tax rate by half, we should also level the playing field for those small and medium-sized businesses by creating a new corporate tax structure that eases the burden on most employers while ensuring that all businesses pay something.
We can also put Illinois jobs first by reinstating the EDGE tax credit for businesses that create new jobs. While we invest in businesses that invest in Illinois, we should also take the step of outlawing any future tax incentives for corporations that ship American jobs out of our country. I think it only makes sense that we should be investing tax dollars in companies that invest in Illinois.
Positioning Illinois as a place for growth also means investing in a strong middle class. This is why the House Democrats’ agenda for economic growth will include an increase in the Earned Income Tax Credit, to help working families keep more of what they earn. And our agenda will include an increased minimum wage.
We will invest in education at all levels. We will work to make our tax code fairer and our schools stronger by requiring the wealthiest in our state to pay a small surcharge only on income over $1 million, with 100 percent of the new revenue going to fund our schools. A well-educated workforce will benefit our businesses in the long term.
We choose this pathway to create jobs, grow our economy and improve the business climate, rather than joining in a race to the bottom and lowering our standard of living by gutting protections for workers hurt on the job through no fault of their own, restricting collective bargaining rights and cutting middle-class wages.
We all see the challenges facing our state. We must address the budget crisis, and we must grow our economy. We can create growth without dismantling the middle class. The oaths taken today by new members of the General Assembly make these challenges ours together. I hope we can work together to address them.