Would You Give Up Your Taxes So Your Company Will Stay In State?
State legislatures have been coming up with more and more ways to try and encourage corporations to stay local. Many have tried to bring down the amount that unemployment benefits may cost and allow them more leniency in turning down claims, or offered even larger tax cuts, cutting their own much needed revenue to keep the “corporate climate” good.
Now, the state of Illinois is trying a new approach. They are allowing some large corporations to keep their employees’ state taxes, “skipping the middle man” of being forced to turn the money in just to have the state government go through all of the hassle of creating new tax breaks to return the funds. Via Eschaton, the new rule applies only to the biggest companies if they promise not to move, and as an added incentive, those companies will get to keep even larger portion of those taxes for new hires.
That part of the equation is supposed to promote job growth and hiring. Assuming, of course, that the companies don’t just lay off other workers to make up the difference.
With so many states already strapped for cash, and using “fee increases” or forcing local governments to raise property taxes and other individual taxes to astronomical heights to make up for even a portion of the loss funding, do businesses really need to be literally taking revenue from the state’s pocket? It’s a question everyone may need to ask sooner rather than later. MoveOn.org believes this approach could be coming soon to your state, too.
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