Mt. Vernon Register-News

State News

March 11, 2013

Closer Look: Business decries Quinn loophole plan

(Continued)

The third proposal would require companies that have companion businesses to file a combined tax return, even if the companion is in the finance, insurance, or transportation fields, which are currently fall under the "non-combination" rule. Quinn argues that rule allows sophisticated companies to avoid taxes. Such companies include General Motors Co. and financing arm GMAC; or printer R.R. Donnelley and its affiliated third-party logistics services for warehousing and transportation

"The governor's plan would suspend these unnecessary loopholes until the bills are paid down," Anderson said. "This is a commonsense proposal that would be good for the economy and help return Illinois to sound financial footing."

Goodman, of the Pew Charitable Trusts, said a study of tax programs in Connecticut found that some were bringing in revenue and jobs even after accounting for such factors as whether lost state revenue would have done as much if spent by the state on employees or programs, or whether a company using a tax break and creating a job wouldn't have hired someone anyway. Other times, states have found the programs aren't doing what they were supposed to, Goodman said.

"Incentives are often part of this competition between states for jobs and investment," Goodman said. "But on the other hand, incentives come with a cost and a lot of states, including Illinois, are still dealing with significant budget problems, so that's why it's so important for states to really do rigorous analysis to make sure the dollars they commit to incentives are dollars well spent."

 

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