At the very moment that Americans are becoming more aware and upset with disparities in income, wealth and corporate influence, Illinois Governor Quinn has signed a tax break benefiting the state’s large corporations. In particular, this bill benefits CME of Chicago, which had threatened to leave the State if they did not get their way.
The announcement on the signing of this bill came late in the day on Friday, December 16, 2011. A late- in-the-day-Friday announcement is typically a sign that the there is no desire to publicize the action to the general public. On the other hand, SB 400, which is a companion bill to the corporate tax cut bill, was not signed. The most probable reason is that the Governor is waiting for a more opportune moment to sign the companion bill, so that it will receive plenty of press attention.
Sears and the Chicagoland Chamber of Commerce have already made press releases praising the Governor for signing the corporate tax break bill. As of this moment, the general public has not responded to the Governor’s action. The bill had been previously sold as a method of keeping jobs in Illinois, which was being denounced as a “business unfriendly” state.
The truth is that prior to the enacting of this bill, Illinois ranked 23rd nationally for state tax burdens on business. That places the state about in the middle – neither exceptionally high, nor lower than average.
The push to give big business another favor looks a little like blackmail with business threatening to leave if they did not get their way. In fact, there are large companies in Illinois that pay little or no tax due to loopholes in the law. Baxter International and Integrys Energy Group both paid zero in taxes while earning over $1.7 billion in profits.
There are also corporations in Illinois that are paying state taxes commensurate with what the law calls for. The difference is that some corporations are “fortunate” enough to have industry-specific tax breaks. The difference seems to be that some corporations are large and aggressive enough to threaten legislators and the Governor with relocation from the state if they do not get their way. Baxter has been skillful enough in its economic blackmail that it has received $21 million from the state of Illinois, rather than paying taxes. This at a time when the state has been forced to delay payment of its bills and the Governor regularly proposes laying off large numbers of employees in order to balance the budget. The harm that is done to the state is difficult to calculate, but could be as high as $28 billion in lost revenue from 2008 to 2010.