Illinois' Arrogant, Ignorant Governor
<http://www.bizzyblog.com/2011/03/30/ibd-on-caterpillar-and-illinois-arrogant-governor/>
Filed under: Economy <http://www.bizzyblog.com/category/economy/>,Taxes
& Government <http://www.bizzyblog.com/category/taxes-government/> ---
TBlumer @ 10:22 am
To say that Illinois Governor Pat Quinn doesn't get it fails to describe
the depth of the man's ignorance.
Here's a recent statement he made about the possibility that one of the
state's marquee employers might leave the state --- a statement which,
after brief news search, I could only find in a Tuesday evening
Investors Business Daily editorial
<http://www.investors.com/NewsAndAnalysis/Article.aspx?id=567530&p=1>:
Caterpillar is not leaving Illinois. They have well-skilled workers
who know how to get the job done. They just signed an agreement with
the United Auto Workers, I think for six years. I don't think we
should get in a panic at all."
Even if Cat keeps its headquarters in Peoria and doesn't reduce its
existing Illinois blue- or white-collar workforce, it will be a hollow
victory. Earth to Quinn: it isn't just about keeping what you have,
which Illinois is barely doing --- maybe. It's about capturing the new
facilities growing companies like Cat build.
On that front, as Rich Miller at Capitol Fax
<http://capitolfax.com/2011/03/29/we-may-not-lose-cat-but-were-definitely-losing-the-war/>
details, Illinois has missed out on the following recent Caterpillar
expansions, most if not all of which might have been reasonable
prospects for the state if it didn't have such a punishing business
climate made worse recently by additional income tax hikes:
* Dec 18, 2008: Cat announces new plant in Texas ...
* January 5, 2009: Caterpillar plant, 600 jobs bound for North
Little Rock
* Jul 30, 2010: Cat announces new North Carolina plant --
850,000-square-foot facility will be used for axle assemblies
* October, 2010: Caterpillar Selects Victoria, TX, For New Hydraulic
Excavator Facility
If an Illinois-based company like Caterpillar won't even think about
expanding in Illinois, it's reasonable to believe that other
Illinois-based companies are acting similarly, and that few out-of-state
companies looking to expand are giving Illinois serious consideration.
The IBD editorial elaborates further, reminding the governor that the
company didn't just spring up out of the Illinois cornfields:
According to the nonpartisan Tax Foundation: "The (Illinois)
corporate income tax will rise from 7.3% to 10.9%, a 49% increase
and (making Illinois') the highest state corporate income tax in the
United States and the highest combined national-local corporate
income tax in the industrialized world."
In other words, anyplace Caterpillar moves --- and that means
anywhere --- the tax situation will be an improvement on what it
faces in Illinois.
*Before he pooh-poohs the possibility of losing Caterpillar, Gov.
Quinn might review the company's history. Cat got its start not in
Illinois, but in California in 1883 as the Stockton Wheel Co. After
various incarnations and acquisitions through much of the 20th
century, it became Caterpillar.*
*In 1967, the company moved its headquarters from Stockton to
Peoria, where it now employs 23,000 of the 100,000 workers who make
those gigantic yellow construction and mining machines that are
among the best in the world, if not the best.*
... Until the governor recognizes that businesses operate on
real-world accounting, not the government's big-tax approach to
business, he's looking at the migration of not only Caterpillar, but
other big home-based enterprises --- State Farm maybe, or McDonald's
--- to states where entrepreneurs and world-class companies are
treated as precious resources, not strip-mined for taxes to pay for
unsustainable and inefficient government.
Caterpillar, of course, is lucky. It can move. Unfortunately, small
towns that rely on business with Caterpillar workers will go under.
So will many small businesses that aren't able to move after such
tax hikes.
If Quinn doesn't think Caterpillar has given him reason to panic,
he'd better think again.
Pat Quinn will not recognize that people --- and companies --- can and
do vote with their feet. Caterpillar did so when it planted its
headquarters in Illinois 44 years ago. It can do so again. So can other
Illinois companies.
--
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