Story By: Kathy Posner
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Sears Tower ChicagoThe Associated Press, through a Freedom of Information request, discovered 107 companies in Illinois have tax-breaks that will expire in 2012, 2013 and 2014. Sears is part of that group so they are talking to other states to see who will give them money to relocate. Very crafty move by the seller of Craftsman products!
If one thinks about it, the wheeling and dealing of the business climate in Illinois resembles a giant game of Groupon. In Groupon, a company offers a customer an incentive to come and try their product. The theory is that once the consumer samples the product, they will come back at full price. That is how the retailer will cover the loss of luring the customer in. Illinois has lured companies to come to the state by offering tax incentives, but now that the “Illinois Tax Groupon” is expiring, the customer does not want to pay full price. They have tasted the grape of reduced taxes and want the Groupon to continue.
That is one of the flaws with the Groupon model. Will the customer come back at full price once they have experienced the service at half price? Illinois has dug an economic hole for itself that is so deep, there is no ladder tall enough to reach fertile ground.
Crain’s Chicago Business reported, “A state spokeswoman said there is no set way for the Department of Commerce and Economic Opportunity to handle expiring tax incentive contracts. But she said the end of a deal isn't a guarantee of a new one."
" ‘This is not an automatic ticket for a company to get additional incentives,' Marcelyn Love said in an e-mail. ‘Our focus is on being responsive to companies so we can better assess their needs and make Illinois an attractive place to do business. If a company decides that they will be making additional investments and are interested in getting state assistance, then we would work with them.’ “
I wonder how long Love’s nose grew as she spouted those lies! Illinois Governor Quinn has already said that he would work with Sears to try to keep them in the state. Sears has not said they will be “making additional investments,” they just threatened to move to another sandbox if they did not get tax breaks.
Here is my advice for Sears: move to another state and accept their “Groupon” tax benefits and then come back to Illinois in a few years for a giant payday. The latest financial incentives Quinn has offered to companies has been escalating as the months have passed. The tax breaks have ranged from a per-job created low of $14,500 (Groupon in 2010) to $49,549 (Continental Tires the Americas) to the most recent JMC Steel Group Inc of $80,000 per job ($2 million for 25 jobs.) Now it is time to take out the calculator.
If Sears demands their incentive at the highest monetary amount Quinn has doled out, then those 5,000 jobs the company has at its headquarters in Hoffman Estates are worth HALF A BILLION dollars to the company. Even at the average per job incentive of $48,000 that still would reap Sears $240,000.000!
A smart corporation would move every few years to a new state and grab the best “Groupon Tax Incentive” they can get. It is not fiscally wise to be a repeat customer when there is always another state that will offer a new “Deal of the Day.”
Read More From Planet Posner Here....
If one thinks about it, the wheeling and dealing of the business climate in Illinois resembles a giant game of Groupon. In Groupon, a company offers a customer an incentive to come and try their product. The theory is that once the consumer samples the product, they will come back at full price. That is how the retailer will cover the loss of luring the customer in. Illinois has lured companies to come to the state by offering tax incentives, but now that the “Illinois Tax Groupon” is expiring, the customer does not want to pay full price. They have tasted the grape of reduced taxes and want the Groupon to continue.
That is one of the flaws with the Groupon model. Will the customer come back at full price once they have experienced the service at half price? Illinois has dug an economic hole for itself that is so deep, there is no ladder tall enough to reach fertile ground.
Crain’s Chicago Business reported, “A state spokeswoman said there is no set way for the Department of Commerce and Economic Opportunity to handle expiring tax incentive contracts. But she said the end of a deal isn't a guarantee of a new one."
" ‘This is not an automatic ticket for a company to get additional incentives,' Marcelyn Love said in an e-mail. ‘Our focus is on being responsive to companies so we can better assess their needs and make Illinois an attractive place to do business. If a company decides that they will be making additional investments and are interested in getting state assistance, then we would work with them.’ “
I wonder how long Love’s nose grew as she spouted those lies! Illinois Governor Quinn has already said that he would work with Sears to try to keep them in the state. Sears has not said they will be “making additional investments,” they just threatened to move to another sandbox if they did not get tax breaks.
Here is my advice for Sears: move to another state and accept their “Groupon” tax benefits and then come back to Illinois in a few years for a giant payday. The latest financial incentives Quinn has offered to companies has been escalating as the months have passed. The tax breaks have ranged from a per-job created low of $14,500 (Groupon in 2010) to $49,549 (Continental Tires the Americas) to the most recent JMC Steel Group Inc of $80,000 per job ($2 million for 25 jobs.) Now it is time to take out the calculator.
If Sears demands their incentive at the highest monetary amount Quinn has doled out, then those 5,000 jobs the company has at its headquarters in Hoffman Estates are worth HALF A BILLION dollars to the company. Even at the average per job incentive of $48,000 that still would reap Sears $240,000.000!
A smart corporation would move every few years to a new state and grab the best “Groupon Tax Incentive” they can get. It is not fiscally wise to be a repeat customer when there is always another state that will offer a new “Deal of the Day.”
Read More From Planet Posner Here....
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