News Column

Do corporate tax breaks create jobs?

January 19, 2014

Sara Burnett; Sara Burnett The Associated Press

CHICAGO - Lawmakers on Friday questioned the effectiveness of the tax breaks Illinois gives companies to keep or create jobs, with one legislator saying there's little verifiable evidence the incentives work and another calling the current system "insanity." Illinois businesses benefited from about $1.15 billion in tax incentives in fiscal year 2012, according to an analysis by the bipartisan Commission on Government Forecasting and Accountability . Yet lawmakers noted the state continues to have one of the highest unemployment rates in the country. Only three states - Nevada , Rhode Island and Michigan - had unemployment rates higher than Illinois' 8.7 percent as of November. "We have to remember every incentive we give comes at the expense of taxpayers," said Rep. Jack Franks , a Democrat from Marengo and chairman of one of the two legislative committees that held the joint hearing. But the reviews weren't all bad. Adam Pollet , director of the Illinois Department of Commerce and Economic Opportunity , said companies that received the state's main business tax credit have created 2 1/2 times the number of jobs they pledged to create. And Connie Beard of the Illinois Chamber of Commerce said the incentive - known as the Economic Development for a Growing Economy, or EDGE, tax credit - has been "a very valuable tool" bringing and keeping business in state. The issue has grown more divisive in recent years, as corporations ranging from Sears to Archer Daniels Midland Corp. have sought multimillion-dollar breaks. After lawmakers ended a special legislative session last year without approving a deal for ADM, influential House Speaker Michael Madigan criticized the requests, saying he found it difficult to support "tax giveaways" for companies that pay little to no corporate income tax.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Telegraph-Herald (Dubuque, IA)

Story Tools