Reeder: Illinois favors Big Business over entrepreneurs
By Scott Reeder November 21, 2012 9:30PM
Updated: December 24, 2012 7:18AM
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 past 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 the corporate income tax by 46 percent, but before the year was out it managed to give away some of that new income to, you guessed it, corporations.
A sweetheart deal with Sears Holding Corp. and CME Group managed to slice away a portion of the new revenue 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 state Capitol, but Illinois has an abysmal environment for entrepreneurs.
The state ranks 48th in the country in generating jobs through creating new businesses, according to data collected between 1995 and 2009.
And that was before Illinois increased the personal income tax rate by 67 percent and the corporate income tax rate by 46 percent.
Tax increases are never good news for businesses. Money that could be reinvested into the business to hire more employees, buy equipment, increase marketing or improve services instead is siphoned away by 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 a small business, 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, Amazon.com 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, a nonprofit research group that supports the free market and limited government.