After Tax Hikes, Illinois Bribing Companies To Stay In The State

Earlier this year states bordering Illinois were “gleeful” at proposed tax hikes intended to close the “Land of Lincoln” state’s huge budget shortfalls. The glee was based on predictions that the tax hikes would drive businesses out of Illinois and into bordering states.

It turns out that the glee was well justified, as Illinois now tries desperately to bribe businesses to stay in the state with huge economic development packages.

Motorolla just got a $100 million bribe, and now hardware giant Sears and sandwich restaurant chain Jimmy Johns want bribes too.

But this begs the question: Wouldn’t it be easier to keep these companies in the state, and even attract new businesses and thus jobs and economic activity, by just lowering taxes? Or at least keeping them lower in the first place?

Raising taxes and then turning around and trying to bribe these businesses into staying in the state seems like the height of lunacy. Not to mention a recipe for graft and corruption. After all, who gets to decide which businesses get an extra special incentives package to stay in the state and which don’t?

The moral of this story is that the best “economic development” policies any given state or community could have is lower taxes and limited government.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • Pfeh

    Again, let them bribe one or two or twelve huge businesses to stay. The majority of businesses in the state are not going to get these offers. Those businesses will either stay and make less, stay and go out of businesses, or get out of town. None of those options are good for Illinois or the greedy tax and spend financial-dimwits that inhabit their state Capital.

    The only thing we must be sure of is that the Federal Government doesn’t show up with bailouts when States like California and Illinois have to declare bankruptcy.

  • http://pocketjacksblog.blogspot.com Jay W.

    Raising taxes and then turning around and trying to bribe these businesses into staying in the state seems like the height of lunacy. Not to mention a recipe for graft and corruption. After all, who gets to decide which businesses get an extra special incentives package to stay in the state and which don’t?

    You know you’re talking about Illinois, right? Nearly every single economic decision made in that state is made with an eye on how much graft can be generated.

    • http://sayanythingblog.com Rob

      Sigh…

      Yes, I know. I guess I just have this pollyannish expectation that they’re really truing to pursue sound policy.

  • Neiman

    This morning (FOX News) it was shown that Wisconsin has jumped 17 places higher on the most business friendly states because of the actions of that Republican Governor and Legislature in putting their fiscal house in order and encouraging job creation.

    Damn inconvenient when the Truth wins out!

    • http://ndgoon.blogspot.com/ Goon

      I saw that as well Neiman, it was interesting that they lowered taxes and became more attractive to business. I wonder if we will see a bunch of companies leave Illinois and go to Wisconsin?

  • DopeyDem

    Gee this sure sounds like all the exemptions from Obamacare doesn’t it? This higher tax thing in Illinois must be frickin great!

  • Guest

    Let em go. Who wants giant chains anyway? Maybe we’ll see more local and small businesses with employees who know what they are talking about instead of massive chain stores selling Chinese shit with employees who don’t appear to have progressed past 3rd grade.

    • Pfeh

      Pretty much flat wrong. The local small businesses will suffer disproportionately under the new tax scheme, since they have lower margins versus the larger chains and they’ll feel a local drop in customer spending a lot more than a multi-state chain store would. This, and the fact that small businesses can’t afford lobbyists to go rent seeking from state Democrats for sweetheart tax exemptions, will guarantee the deaths of more local shops. Leaving room for the giant chains to come in and fill market voids where they chose, charging what they chose.

      • Guest

        So you think people will stop buying products in Illinois? Perhaps you are flat wrong.

        • Pfeh

          Let me help, as you seem to be struggling. Taxes go up, people have less money in their pockets. People have less money, they must spend or save less.

          I did not say that people will stop buying products in Illinois – you’re hallucinating again on that. I pointed out that small businesses weather consumer spending cutbacks worse than large chains. Try harder at reading comprehension.

          • Guest

            Get rid of the chains, like they are in Illinois, and it’s a mute point. You try harder.

        • http://ndgoon.blogspot.com/ Goon

          No they will just move to somewhere else that has lower taxes and better job markets.

          • Guest

            If they have enough money to do that, why would they not be able to support local businesses?

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