S&C electric says 1,750 jobs in our ward are threatened by a new proposed state tax. Where do folks stand on protecting these jobs?From Crains:http://www.chicagobusiness.com/cgi-bin/mag/article.pl?article_id=27280&postDate=2007-02-17"The gross-receipts tax Gov. Rod Blagojevich is preparing to unveil reflects his belief that Illinois businesses don't pay their fair share of taxes. Businesses paid $25.2 billion, or 45.4%, of the $55.5 billion in state and local taxes collected in Illinois in 2005, according to a study last year by Ernst & Young LLP for the Council on State Taxation (COST), a tax research group in Washington, D.C., funded by about 600 large corporations. The figure includes all taxes paid in Illinois by businesses, including property taxes....That's higher than both the national average of 43.6% and the share that business pays in neighboring Midwest states."If you're not profitable, because of investment or expansion, that's when you really get hit," says Michael Moses, financial services director for S&C Electric Co., one of the biggest remaining manufacturers in Chicago, with 1,750 employees on the North Side. A 1% gross-receipts tax "would at least triple and probably quadruple our tax liability," in good times and bad.Critics say one big problem with a gross-receipts tax is "pyramiding," in which the tax ratchets up the cost of goods at each stage of production. Proponents of the tax say that problem is overstated. For Mr. Moses, it's clear that many of S&C's Illinois-based suppliers would just have to absorb the tax if they want to keep their customers."If we could get the same material from an outside supplier, that's an easy business decision," Mr. Moses says.
> S&C electric says 1,750 jobs in our ward are threatenedwhat is your source for this quote?it is not in the article you cite
> Gov. Rod Blagojevich ... his belief that Illinois businesses don't pay their fair share of taxes.Gov. Blagojevich is correct. And S&C is an excellent example. S&C is not a good citizen.S&C is not a 49th ward or Chicago or Illinois company. S&C incorporated in Delaware in order to minimize the taxes they pay in Illinois.In 2004 S&C paid Alderman Moore to freeze their property taxes at 2004 levels for at least 23 years thanks to the S&C TIF AKA the Pratt-Ridge TIF. While homeowners debate how to fund our schools and County health system, S&C can kick back, they are all set.
This matter of taxes levied on manufacturers in IL and in Chicago, vs. favors granted to a few, is worthy of a blog of its own. Here is another example of how our fair city is, on the whole, a very hostile climate for business and especially manufacturing, yet benefits a few favored players, in this case S & C Electric.I don't care if they are not locally owned, they are employing 1,700 local people in relatively decent jobs, and I would not have the heart to hike their taxes. On the other hand, the situation is egregiously unfair to beleagured homeowners who are being blasted out of their houses, and therefore really can't be tolerated.We need to work on reforming the tax structure in such a manner as to be fair to both home owners, and businesses. We can't afford to lose any more of either. Having had clients who were owners or partners in local manufacturing concerns that finally buckled under the load of the taxes and multiple bureacracies and regulatory burdens, I can see why a politician might bend to keep manufacturing in the city that has lost so much over the past 30 years, to the detriment of our local economy and our wage earners. The tens of thousands of jobs lost in this time are not replaced by crap retail and service jobs. The fault we can lay at Moore's doorstep is that he has driven so many other viable businesses from this area, while coddling his pet contributors. But it's too bad that the city is so financially damaged by TIFs and other gimmes for favored cronies that the only way to offset the lost taxes is to create an onorous tax burden for every other concern that does not pay to pay, like a manufacturer of my acquaintance whose tool and die on Elston will most likely shut down the day he retires, taking a couple hundred low to medium wage jobs WITH COMPLETE HEALTH BENEFITS down the tubes with it. His children are not inspired to continue on in the face of the foriegn competition engendered by our 'free trade' laws AND the overwhelmingly hostile Chicago business climate. And paying politicians for the right to do business without undue harrassment is not something they were bred to expect to have to do.
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