“Rather than dole out that $150 million to one big company, how about this: Give $30,000 to 5,000 small companies to encourage them to locate in Illinois. By comparison, a successful Chicago-based accelerator — Excelerate Labs — funds 10 companies per year to the tune of $25,000.”
This is the wrong framework to look at tax breaks. Sears was going to leave the state. They would have taken 6,100 jobs with them. Those are taxpayers, not only on the state level but on the local level. Businesses like Sears create jobs slower than a successful start up might, but they offer a platform for start ups to build around. Viewpoints is a start up that is built around the Sears infrastructure.
It also assumes an economic fixed pie. Economies aren’t fixed. Like dark matter in space they can grow forever and in all directions if you don’t constrain them. It’s not a zero sum game. Also, the calculation of tax breaks related to the budget are always looked at with accounting numbers and not economic ones. Economic numbers are dynamic, and a tax break has been shown to have a 1:3 multiplier effect. For every one percent in the decrease of taxes, there is a corresponding 3% bump in GDP. Illinois ought to be cutting taxes to increase economic growth. Instead, they raised them.
NEW TIME Today, at 9:30 AM PT: Get the Market Movements in Advance: William's Edge Webinar for January 30th, 2014 | John Ransom
NEW TIME Today, at 9:30 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for January 26th, 2014 | John Ransom