Pay to stay
Earlier this year Texas Gov. Rick Perry wrote a letter to Illinois’ businesses and individuals trying to sell them on a move to Texas. The sales pitch was simple — it wasn’t tax credits, grants or sweetheart deals. The sales pitch was this — Texas doesn’t have an income tax. Perry understands something that Illinois...
Earlier this year Texas Gov. Rick Perry wrote a letter to Illinois’ businesses and individuals trying to sell them on a move to Texas. The sales pitch was simple — it wasn’t tax credits, grants or sweetheart deals. The sales pitch was this — Texas doesn’t have an income tax.
Perry understands something that Illinois politicians don’t — cronyism is the wrong approach to a competitive economy.
In Illinois politics, the business model is to channel taxpayer dollars to the businesses and industries that politicians believe deserve financial support, with the hope of fostering business activity and job creation.
But the money needed to dole out handouts and tax breaks is taken, through higher taxes, from companies already operating in Illinois’ tough economy; not just from successful companies, but also from the entrepreneurs who are struggling to make their dreams come true.
That’s why, ironically, Illinois’ model to foster business activity hurts and destroys thousands of businesses in the process.
Archer Daniels Midland Co., or ADM, is Illinois’ most recent crony endeavor. The company is No. 27 on the Fortune 500 list and has about 30,000 employees around the world.
A bill filed recently in the Illinois House of Representatives would give ADM a 10 percent break on utility taxes for up to 30 years and a credit against some state income tax withholdings.
The value of the tax breaks has not yet been disclosed, but ADM is seeking as much as $24 million in tax breaks to keep the company headquarters in Illinois.
Illinois already has one of the least competitive economies in the nation. Following the same path that got the state here – high taxes and cronyism — is the wrong way forward.