The State Of Illinois Raies Tax Rates Then Gives Tax Breaks To Companies To Keep Them From Leaving

See Illinois Tax Firesale: A case study in high corporate rates and special favors from the 6-9 WSJ. Excerpts:

"No doubt he [Governor Quinn] will [give Sears a deal], since in two years in office Mr. Quinn has doled out corporate welfare to at least 80 firms, costing the state nearly $500 million, according to a tally by the Chicago Tribune. Late last year Navistar, the commercial truck engine maker, secured $65 million in handouts. Continental Tire nabbed $19 million. Even deal-of-the-day Web business Groupon, which is preparing an IPO to raise $750 million, grabbed $3.5 million in tax credits to stay in Chicago. U.S. Cellular got a $7.2 million package to keep its headquarters in the Chicago area, while Chrysler received an "investment package" worth $62 million for its Belvidere assembly plant.

The irony is that the recipients of these sweetheart deals are the very enterprises that Mr. Quinn was counting on to pay more taxes. Six months ago the Governor and union economists said the Illinois tax hike wouldn't chase businesses out of the state. Now Mr. Quinn is seducing businesses to stay by chopping their tax liabilities.

Illinois voters who were sold the historic tax hike on grounds that profitable corporations should pay "their fair share" might wonder how tilting the playing field in favor of those with the highest-priced lobbyists is fair. "Why should we pay the taxes that Motorola and other corporations don't?" asks Jack Roeser, the owner of Otto Engineering, an employer of 600 workers in Carpentersville. Good question.

But for Mr. Quinn and the political class, this is precisely the point. Politicians love high tax rates because they can act as brokers to offer tax breaks to the lucky few. Mr. Quinn poses as a populist for unions and the Democratic left in supporting high tax rates, while he then takes credit a second time for doling out tax favors that he claims will keep jobs in the state.

The victims are the thousands of businesses that don't get the favors, and an overall state economy that is less attractive for employers. That's one reason Illinois has ranked 47th of the 50 states in job creation in the last decade, and has lost more private jobs (360,000) than the entire private work force of Delaware, according to the Illinois Policy Institute."