Stop Picking Winners and Losers

by Emily Dietrich This year Illinois lawmakers spiked taxes on employees and employers alike. But when big businesses threatened to move to other states in response to the higher taxes, Illinois politicians rushed in and offered tax cuts and other incentives. Companies like Motorola and Caterpillar were saved. But what’s the real story behind the tax increases?...

by Emily Dietrich

This year Illinois lawmakers spiked taxes on employees and employers alike. But when big businesses threatened to move to other states in response to the higher taxes, Illinois politicians rushed in and offered tax cuts and other incentives. Companies like Motorola and Caterpillar were saved.

But what’s the real story behind the tax increases? Quinn raised taxes on hard working Illinoisans and their small businesses, only to hand much of that revenue over to large corporations in special deals.

Picking corporate winners and losers isn’t something new for Illinois. Sadly, Illinois politicians have systematically chosen particular people, companies, and industries to boost. This process does nothing more than place the chosen few at a competitive advantage over all other job creators in the state.

For example, the Illinois Department of Commerce and Economic Opportunity (DCEO) touts the numbers of grants, incentives, and breaks it dolls out to hand-picked groups and businesses. In fact, in a recent presentation, they compare the number of Illinois’s business incentives to numerous other states. Astonishingly, Illinois has the most incentive programs.

Illinois uses taxpayer money to fund ten different incentive programs. Texas, on the other hand, only offers three. Does this mean that Illinois is better at producing jobs than Texas? Hardly.

Texas offers a true business incentive: a pro-business climate that allows companies to grow jobs and put people back to work.  Instead of excluding companies that don’t fit into arbitrary categories, Texas provides an even playing field that attracts companies of all shapes and sizes. For example, Texas is a right to work state with no income tax, ongoing tort reform, and flexible regulatory policy. As of April, Texas had created 37% of all U.S. jobs since the national recession ended.

This isn’t the case for Illinois.

Illinois politicians continue to pick winners and losers. Since 2009, almost 150 companies have received special perks at taxpayers’ expense from the DCEO. This has cost the state $621.4 million.

Lawmakers have admitted to jumping when large companies such as Caterpillar threaten to leave the state. But have they jumped to support your small business or to help put your family member back to work?

Lawmakers and bureaucrats need to stop rushing in with special packages for a select few. Instead, taxes need to be lowered across the board so that businesses large and small, as well as Illinoisans, have the best incentive to produce and invest in Illinois: the ability to keep most of what they earn.

Lawmakers should start by repealing the tax hike that spiked the personal income tax rate 67 percent and the corporate income tax rate 46 percent. This would be a great first step toward putting Illinois’s families back to work.