Chicago gives Whole Foods $10M tax incentive

In a free enterprise system, businesses grow organically by providing customers with products of value, and in return customers reward those businesses with their hard-earned money. Unfortunately, in Illinois the free enterprise system has been corrupted by bad government policies. Because of Illinois’ high taxes, regulations and anti-free-market policies, many businesses now resort to playing...

In a free enterprise system, businesses grow organically by providing customers with products of value, and in return customers reward those businesses with their hard-earned money.

Unfortunately, in Illinois the free enterprise system has been corrupted by bad government policies.

Because of Illinois’ high taxes, regulations and anti-free-market policies, many businesses now resort to playing the game and seeking out cronyism packages to beat their competitors and survive.

Chicago Mayor Rahm Emanuel recently announced that organic-friendly Whole Foods Market will be getting an artificial taxpayer subsidy of $10 million in Tax Increment Financing, or TIF, district funds to build a new store in Englewood.

Unfortunately, this scenario plays out hundreds of times over each year in Chicago. Many of Whole Foods’ competitors, such as Jewel-Osco, Target, Walgreens and Mariano’s, also seek – and profit from – cronyism giveaways through TIF districts, which are special economic zones that gives taxpayer money to developers. This creates an unfair playing field for local businesses – especially smaller businesses. These smaller businesses are often left feeling the burdens of higher taxes and onerous regulations when their bigger, politically connected competitors win multimillion-dollar subsidies.

I don’t primarily blame companies for playing the cronyism game, especially when all of their local competitors are receiving subsidies. It’s the rigged system that’s created by politicians that’s to blame.

Just how costly is the TIF district problem? Chicago taxpayers paid out more than $457 million to TIF districts in 2012 alone. Most of the money will go to economic development projects similar to the Whole Foods deal. Statewide, more than $1 billion in property taxes is collected and spent via TIF districts.

Special tax breaks and tax giveaways to corporations create an environment across the state that tells business owners that in order to succeed as a business, who you know is often more important than how well you serve your customers.

It should come as no surprise the state of Illinois ranks 48th in economic outlook, and Chicago has the third-lowest entrepreneurship rate among the 15 largest metropolitan areas in the country. While high taxes and over-regulation are the main drivers of the state’s bad business environment, government officials in Illinois have created a business culture of cronyism where businesses can beat out their competitors is by getting special favors from government officials.

When politicians are in the business of picking winners and losers in the economy, we all lose.

Politicians should treat all businesses equally, and socially responsible businesses should fight for a level playing field – with lower taxes and regulations for all.