Reeder: Illinois’ corporate tax breaks out of control
During the six years that Pat Quinn has been governor of Illinois, his administration has managed to give away more than $500 million in tax breaks to corporations.
Mind you, this is the same administration that pushed to increase the state income tax from 3 percent to 5 percent. The same people who preside over a state government that’s months late in paying its bills, has the worst credit rating of the 50 states and has the worst-funded pension system in the nation.
Quinn inherited much of that mess, and he’s not the first governor to succumb to what amounts to corporate extortion.
But Quinn has put corporate subsidies into overdrive through Illinois’ EDGE tax credit program.
Companies such as Boeing, Continental Tire and Ford all have been slurping at the state trough at the expense of ordinary taxpayers.
The secret for businesses to get these handouts is to simply threaten to move elsewhere.
It’s hardly a fair way to administer funds. Don’t believe me?
Well, here’s a question to ask yourself: Who do you think is more deserving of a tax break — your family or Ford?
Yeah, I thought so.
The Quinn administration likes to talk about how many jobs this corporate welfare has “retained” or attracted to Illinois. They put the number at about 61,000.
That figure is not believable. And here’s why — no one knows what’s going on in the minds of corporate chiefs.
Would they uproot their businesses and leave the Land of Lincoln if they didn’t get a handout from the state? Probably not. But we’ll never know.
More important, when government creates an uneven playing field, jobs aren’t just added, they’re also subtracted.
Subsidized companies may add jobs, but what about their competitors forced to lay off workers because they are having trouble competing?
Or what about working families and small businesses forced to pay higher taxes to fund this corporate cronyism? They will have less to spend, and jobs that otherwise would be created won’t happen because money is being funneled to big corporations.
But no effort is made by the administration to calculate how many jobs the EDGE program may be costing the Prairie State.
Even the leaders of the public employee unions are appalled by Quinn’s penchant for corporate giveaways. It just goes to show you, even a broken clock is right twice a day.
A far fairer way to promote economic development would be to simply lower taxes for everyone — families, small businesses, large corporations. No special favors would be given.
Industries would decide to come to Illinois, stay or grow based on the state’s overall business climate.
No longer would government pick winners or losers. That would be left to the consumer.
And yet Quinn, as well as his Republican and Democratic predecessors, have blanched at such a notion.
That would mean no more press releases trumpeting how many jobs they have “created.”
It would mean no more ribbon cuttings and photo ops to attend, where they can brag about the latest business they have anointed with taxpayer cash.
Politicians would call that a nightmare. For the rest of us, it’s a dream.
Scott Reeder is a veteran
statehouse reporter and the journalist-in-residence at the Illinois Policy Institute, a nonprofit research group that supports the free market and limited government.