Dunking on the Sears Tower
Just like the major league sporting franchise boondoggle, the corporate tax break boondoggle is like a never ending bowl of soup for politicians to ladle out favors from…1
Ramsin Canon of Gapers Block notes:
This week Governor Quinn signed into law special tax incentives for the insanely profitable Chicago Mercantile Exchange and the poorly run Sears. The Associated Press offers a sort-of warning: that scores of companies have tax “packages” that are to expire over the next few years. If you are a shareholder in any of those companies, would you expect anything less than threats to relocate from your CEO? And if you’re a government affairs person representing a business in Springfield, what would your attitude be towards a legislator who voted for this tax package but won’t put forward one for you?
I never bought for a minute that CME and Sears were actually going to leave. Nor do I suspect that Mayor Emanuel, who helped engineer the cuts for CME, or most of the legislators who voted for the cuts, actually bought the threats either. But the threat to leave is a formality that gives cover to politicians who want to hand their political supporters a nice plum but want to obscure the quid pro quo. Seeing now that the tactic works, we should fully expect a tidal wave of employers demanding incentives to stay in the state.
You know, if we cut our tax rates to 0%, we’ll get all the businesses. All the businesses!
(click here to continue reading Give Em An Inch, They Tax Break All Over You – Gapers Block Mechanics | Chicago.)
Oh joy!
As state senators sent the tax package to the governor’s desk last week, economic development experts said other companies are likely to threaten to move as well unless Illinois offers them more financial goodies. More than 100 companies, including Deere & Co. and Abbott Laboratories, have incentive packages expiring in the next three years — and may want better deals to keep jobs in Illinois.
Businesses thinking of moving to the state could demand even bigger incentives or play Illinois against other states in a bidding war, experts said.
“Once it becomes known that you’re giving incentives, other companies are going to ask for them. Why wouldn’t they?” said Judith Stallmann, a professor at the University of Missouri-Columbia who has studied economic development.
(click here to continue reading In the game of tax breaks, states play at their risk | The Salt Lake Tribune.)
Footnotes:- yeah, a horrible metaphor, sorry, pressed for time [↩]