Friday, December 20, 2013
Illinois' Welfare State - for Really Big Corporations
Illinois corporations are leaving and threatening to leave Illinois.
To stop this exodus, the Democrat-controlled Illinois Legislature is offering tax breaks to a number of really big corporations. Those breaks will be paid for by you, me and small businesses. A cynic might call this "welfare for large corporations."
In case you missed it, in January of 2011, the Legislature raised Illinois' corporate income tax to 9.5 percent. No Republicans voted for the increase, either in the House or the Senate.
At the time, Gregory Baise, head of the Illinois Manufacturers' Association, according to the Dec. 13, 2011 Huff Post Chicago, predicted that "the only businesses that will benefit (will be) the moving companies. They will be helping many of my members (corporations) move out of (Illinois)." Illinois has a "state bird." Maybe Mr. Baise should be named "state prophet!"
Last month Office Depot Inc. and OfficeMax completed a $1.2 billion merger. the new company will be called Office Depot. Prior to the merger, OfficeMax was based in Naperville, Office Depot was headquartered in Boca Raton, Fla.
The new Office Depot has picked Boca Raton, for its global headquarters, over the Illinois home of OfficeMax, its merger partner. Both companies, of course, asked for tax breaks from Florida and Illinois.
Office Depot Inc. had sought a $53 million EDGE tax credit from Illinois over 15 years. When the incentive failed to pass the Illinois House, Office Depot opted to locate its new headquarters in Boca Raton.
Office Depot CEO Roland Smith said that, after assessing its options, the company determined Boca Raton provided a way for it to drive better profitability and reach planned savings. Businesses prefer to be profitable! According to Mr. Smith, Office Depot looked at a number of factors, including the cost to run each location, lease obligations and sublease considerations, government incentives and tax implications.
Prior to merger, OfficeMax had about 1,600 employees at Naperville. Office Depot Inc. had about 1,700 in Boca Raton. We are told that it is too early to estimate how many OfficeMax employees might move to Boca Raton. It does not appear that any of the 1,700 employees of the old Office Depot Inc will be moving to Illinois.
At the same time Archer Daniels Midland Co. (ADM) has been discussing relocating its corporate headquarters with representatives from St. Louis, Minneapolis, Dallas, Atlanta, etc. Presently ADM has its corporate headquarters in Decatur.
To induce ADM to retain jobs in Decatur and relocate its headquarters to Chicago, Democrat State Sen. Andy Manar, of Bunker Hill, wants the legislature to give ADM a $24 million Edge tax incentive -- $1.2 million over 20 years.
Directly upon learning that Office Depot was heading to Florida, State Sen. Bill Brady, R-Bloomington, called on Gov. Pat Quinn to bring the House back to Springfield to pass an incentive package to keep ADM in Illinois. (capitolfax.com/2013/12/10/officemax-react/).
So, why are corporations leaving and threatening to leave the state? The Tax Foundation has the numbers.
Look at what Illinois, with its 9.5 percent corporate income tax, is competing against: Colorado, 4.63 percent. Florida, 5.5 percent. Georgia, 6 percent and Alabama, 6.5 percent.
Look at the combined city and average local sales tax rates: Illinois, 8.13 percent. Florida, 6.62 percent. Colorado, 7.39 percent. Georgia, 6.69 percent. Alabama, 8.48 percent.
Or look at the Unemployment Insurance rates and taxable wage base. Illinois' highest rate is 8.4 percent on a taxable wage base of $12,740. Florida's is 5.4 percent on $7,000. Georgia's is 5.4 percent on $8,500. Colorado's is 5.4 percent on $10,000. Alabama's is 6.7 percent on $8,000
So, when it is cheaper -- more profitable -- to do business in other states, why would any company choose to remain in Illinois? The answer is simple.
Illinois bribes them to stay here with corporate welfare. If you're big enough, the Legislature will give you breaks that are not available to little businesses.
In Dec. of 2011, Gov. Quinn signed legislation that granted tax breaks and incentives aimed at keeping two large employers in Illinois: Sears Holdings Corp. and CME Group Inc. (operator of the Chicago Mercantile Exchange).
According to the Chicago Tribune, the deal gave Sears tax credits worth $15 million a year for 10 years, which it can use against withheld employee income taxes. The deal also would extend a special taxing district, reducing the company's local property tax bill for another 15 years. CME expected to pay about $158 million for 2011, less than Illinois's 9.5 percent corporate income tax. The legislation is expected to cut that tax bill by nearly half.
The governor justifies the raid on the Illinois treasury as follows: "You have to defend yourself. If Ohio is offering $400 million to Sears, a company that has thousands of employees in Illinois, we will defend ourselves with a reasonable, adequate approach."
I'm sorry. This stinks. President Obama says it's fair to tax the rich to benefit the poor. Gov. Quinn, House Speaker Michael Madigan, Senate President John Cullerton and their cronies in the Legislature have it the other way around: tax the small guy to benefit the rich.
The solution isn't to incentivize big corporations by bribing them to stay in Illinois. The real solution is to lower the corporate tax rate for all corporations. Do that and the incentive for all corporations to relocate out of Illinois will disappear. Of course, that might require some fiscal discipline, and that is unknown in Springfield.
Posted Online: Dec. 20, 2013, 12:00 am - Quad-Cities Online
by John Donald O'Shea
Copyright 2013
John Donald O'Shea
John Donald O'Shea, of Moline, is a retired circuit court judge.
Thursday, December 5, 2013
'Means' and 'Ends': Whither Goest America?
Why is compromise in Washington no longer possible? Consider this: There are at play in America two diametrically opposed systems of morality.
The Catholic Church traditionally has taught that the morality of human acts depends on the "goodness" of (a) the object chosen, (b) the intention and (c) the circumstances. It holds that neither the "goodness" of the object nor the intention (for example, helping one's neighbor) justifies using means that are evil, such as lying, demonizing your neighbor or stealing. The church teaches that "the end does not justify the means," and that "one may not do evil so that good may result from it."
The opposing system, which is perhaps best described by Saul Alinsky, teaches that if the "end" is good, the morality of the "means" chosen to achieve that end is not a matter worthy of consideration. All that matters is that the means chosen will work.
In his book, Rules for Radicals, Alinsky devotes his second chapter to a discussion of means and ends. He writes:
"The second rule of the ethics of 'means and ends' is that the judgment of the ethics of 'means' is dependent upon the political position of those sitting in judgment. If you actively opposed the Nazi occupation and joined the underground Resistance, then you adopted the means of assassination, terror, property destruction, the bombing of tunnels and trains, kidnapping, and the willingness to sacrifice innocent hostages to the end of defeating the Nazis.Those who opposed the Nazi conquerors regarded the Resistance as a secret army of selfless, patriotic idealists, courageous beyond expectation and willing to sacrifice their lives to their moral convictions. To the occupation authorities, however, these people were lawless terrorists, murderers, saboteurs, assassins, who believed that the end justified the means, and were utterly unethical according to the mystical rules of war. Any foreign occupation would so ethically judge its opposition. However, in such conflict, neither protagonist is concerned with any value except victory. It is life or death."
Alinsky would no doubt see universal health care as a matter of "life and death." As such, he would place the "have nots" in the shoes of the Resistance, fighting the Nazi occupation, and those who oppose universal health care, in the shoes of the Nazi occupiers. For that reason, an Alinsky-ite would ask only what means he would work? Fair and truthful political argument? Lying? Demonizing your opponents? Destroying his reputation? Calling him a racist? Bribing reluctant supporters? Punishing political opponents?
Alinsky has written, "Life and how you live it is the story of means and ends. The 'end' is what you want, and the 'means' is how you get it. Whenever we think about social change, the question of means and ends arises. The man of action views the issue of means and ends in pragmatic and strategic terms. He has no other problem; he thinks only of his actual resources and the possibilities of various choices of action. He asks of ends only whether they are achievable and worth the cost; of means, only whether they will work. To say that corrupt means corrupt the ends is to believe in the immaculate conception of ends and principles. The real arena is corrupt and bloody. ... he who fears corruption fears life."
Once the Alinsky-ite decides that the end is achievable, and worth the cost, his only other question is whether the means chosen will work. Therefore if lies will work, lying is a permissible means. If destroying your opponents reputation will work, that is permissible. And, at the extreme, if assassinating your opponent works, do it! And if by controlling the press you can stifle all outcry, that too is an acceptable means.
For the Alinsky-ite, the individual cannot stand the way of the good of the masses: "The practical revolutionary will understand Goethe's 'conscience is the virtue of observers and not of agents of action;' in action, one does not always enjoy the luxury of a decision that is consistent both with one's individual conscience and the good of mankind. The choice must always be for the latter. Action is for mass salvation and not for the individual's personal salvation. He who sacrifices the mass good for his personal conscience has a peculiar conception of 'personal salvation'; he doesn't care enough for people to be 'corrupted' for them."
The church teaches otherwise: "Social justice can be obtained only in respecting the transcendent dignity of man. The person represents the ultimate end of society, which is ordered to him. Respect for the human person entails respect for the rights that flow from his dignity as a creature.These rights are prior to society and must be recognized by it. They are the basis of the moral legitimacy of every authority: by flouting them, or refusing to recognize them in its positive legislation, a society undermines its own moral legitimacy. If it does not respect them, authority can rely only on force or violence to obtain obedience from its subjects."
The great problem, of course, with Alinsky's view of ends and means is that if you and your friends can assassinate me (politically or actually) to achieve political or economic mass good, then why can't I and my friends employ like means against you to achieve our notions of mass good? What sort of society do you have when everybody and every political faction lies, bribes and blackmails in support of what they believe to be "social justice?"
Alinsky's equating the struggle between the "have-nots" and the "haves" to war and Nazi occupation turns civilian life into war. But war is the absence of morality and the rule of law. "War is Hell." Is that what we want for ourselves and our children?
So, why is compromise becoming impossible in Washington? How do you compromise when the other side lies about you and the issues? Who vilifies and demonizes you? Who calls you a racist?
Alinsky's notion that the individual and his conscience must be sacrificed for the mass good scares the hell out of me. His paradise looks too much like a new and unimproved version of Stalin's USSR, or Hitler's Germany. If the government -- on behalf of the masses -- determines that the ends are achievable and worth the cost, what prevents the despoilment, destruction or enslavement of the minority "haves?"
John Donald O'Shea of Moline is a retired circuit court judge.
Posted Online: Dec. 05, 2013, 12:00 am - Quad-Cities Online
by John Donald O'Shea
Copyright 2013
John Donald O'Shea
The Catholic Church traditionally has taught that the morality of human acts depends on the "goodness" of (a) the object chosen, (b) the intention and (c) the circumstances. It holds that neither the "goodness" of the object nor the intention (for example, helping one's neighbor) justifies using means that are evil, such as lying, demonizing your neighbor or stealing. The church teaches that "the end does not justify the means," and that "one may not do evil so that good may result from it."
The opposing system, which is perhaps best described by Saul Alinsky, teaches that if the "end" is good, the morality of the "means" chosen to achieve that end is not a matter worthy of consideration. All that matters is that the means chosen will work.
In his book, Rules for Radicals, Alinsky devotes his second chapter to a discussion of means and ends. He writes:
"The second rule of the ethics of 'means and ends' is that the judgment of the ethics of 'means' is dependent upon the political position of those sitting in judgment. If you actively opposed the Nazi occupation and joined the underground Resistance, then you adopted the means of assassination, terror, property destruction, the bombing of tunnels and trains, kidnapping, and the willingness to sacrifice innocent hostages to the end of defeating the Nazis.Those who opposed the Nazi conquerors regarded the Resistance as a secret army of selfless, patriotic idealists, courageous beyond expectation and willing to sacrifice their lives to their moral convictions. To the occupation authorities, however, these people were lawless terrorists, murderers, saboteurs, assassins, who believed that the end justified the means, and were utterly unethical according to the mystical rules of war. Any foreign occupation would so ethically judge its opposition. However, in such conflict, neither protagonist is concerned with any value except victory. It is life or death."
Alinsky would no doubt see universal health care as a matter of "life and death." As such, he would place the "have nots" in the shoes of the Resistance, fighting the Nazi occupation, and those who oppose universal health care, in the shoes of the Nazi occupiers. For that reason, an Alinsky-ite would ask only what means he would work? Fair and truthful political argument? Lying? Demonizing your opponents? Destroying his reputation? Calling him a racist? Bribing reluctant supporters? Punishing political opponents?
Alinsky has written, "Life and how you live it is the story of means and ends. The 'end' is what you want, and the 'means' is how you get it. Whenever we think about social change, the question of means and ends arises. The man of action views the issue of means and ends in pragmatic and strategic terms. He has no other problem; he thinks only of his actual resources and the possibilities of various choices of action. He asks of ends only whether they are achievable and worth the cost; of means, only whether they will work. To say that corrupt means corrupt the ends is to believe in the immaculate conception of ends and principles. The real arena is corrupt and bloody. ... he who fears corruption fears life."
Once the Alinsky-ite decides that the end is achievable, and worth the cost, his only other question is whether the means chosen will work. Therefore if lies will work, lying is a permissible means. If destroying your opponents reputation will work, that is permissible. And, at the extreme, if assassinating your opponent works, do it! And if by controlling the press you can stifle all outcry, that too is an acceptable means.
For the Alinsky-ite, the individual cannot stand the way of the good of the masses: "The practical revolutionary will understand Goethe's 'conscience is the virtue of observers and not of agents of action;' in action, one does not always enjoy the luxury of a decision that is consistent both with one's individual conscience and the good of mankind. The choice must always be for the latter. Action is for mass salvation and not for the individual's personal salvation. He who sacrifices the mass good for his personal conscience has a peculiar conception of 'personal salvation'; he doesn't care enough for people to be 'corrupted' for them."
The church teaches otherwise: "Social justice can be obtained only in respecting the transcendent dignity of man. The person represents the ultimate end of society, which is ordered to him. Respect for the human person entails respect for the rights that flow from his dignity as a creature.These rights are prior to society and must be recognized by it. They are the basis of the moral legitimacy of every authority: by flouting them, or refusing to recognize them in its positive legislation, a society undermines its own moral legitimacy. If it does not respect them, authority can rely only on force or violence to obtain obedience from its subjects."
The great problem, of course, with Alinsky's view of ends and means is that if you and your friends can assassinate me (politically or actually) to achieve political or economic mass good, then why can't I and my friends employ like means against you to achieve our notions of mass good? What sort of society do you have when everybody and every political faction lies, bribes and blackmails in support of what they believe to be "social justice?"
Alinsky's equating the struggle between the "have-nots" and the "haves" to war and Nazi occupation turns civilian life into war. But war is the absence of morality and the rule of law. "War is Hell." Is that what we want for ourselves and our children?
So, why is compromise becoming impossible in Washington? How do you compromise when the other side lies about you and the issues? Who vilifies and demonizes you? Who calls you a racist?
Alinsky's notion that the individual and his conscience must be sacrificed for the mass good scares the hell out of me. His paradise looks too much like a new and unimproved version of Stalin's USSR, or Hitler's Germany. If the government -- on behalf of the masses -- determines that the ends are achievable and worth the cost, what prevents the despoilment, destruction or enslavement of the minority "haves?"
John Donald O'Shea of Moline is a retired circuit court judge.
Posted Online: Dec. 05, 2013, 12:00 am - Quad-Cities Online
by John Donald O'Shea
Copyright 2013
John Donald O'Shea
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