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  • Wisconsin Makes A Move On Illinois Business

    Posted by Dan from Madison on January 31st, 2011 (All posts by )

    Our new Governor (Wisconsin) Scott Walker has signed legislation giving businesses that relocate to Wisconsin two years “free” – no corporate OR personal income taxes:

    MADISON (WKOW) — Governor Scott Walker has signed a bill that gives income tax breaks for companies that relocate to Wisconsin.

    The bill will forgive corporate and personal taxes for two years for companies that move to the state. The company could not have been located in Wisconsin for at least two years in order to qualify

    I think they mean personal income taxes such as if you were running the company as a pass through like an LLC. I assume that is what they are talking about. Any way you slice it, this is fantastic news.

    This got through the legislature with lightning speed, helped out by the fact that all three of our branches are Republican controlled now up here behind the cheddar curtain. I also read today that the public employee unions are getting ready for some very bad news for them in the near future.

    We have just begun with the Walker administration, but I am very hopeful and happy by this stroke. Walker also sent back the Obama buck$ that would have started out the sham “high speed” rail network that would have been a boondoggle for the ages.

    We may as well pick off what is left of the Illinois corpse before other states do.

    Hopefully Walker will end up being a star like some other up and comers such as Mitch Daniels of Indiana.

     

    14 Responses to “Wisconsin Makes A Move On Illinois Business”

    1. John Says:

      I’m sorry, I just can’t resist it. I live in Indiana and have corresponded with Mr. Daniels’s office. If he is an up and coming star things are in a sad state.

      This is the man who argues for a tax on business property which is triple that on non-business property without offering any shadow of evidence that busineses are generating more costs to the public. Also, he argues that the great virtue of a heavy property tax is that people have to pay it (it is a dependable income stream for the state) no matter how bad the economy gets. Furthermore he seems to believe that while people can make purchases in IL or OH or KY to avoid sales taxes that they can’t relocate their homes or businesses across state lines.

      Since he seems to believe that businesses can’t relocate I don’t think IL has to worry about IN doing what WI is doing…

      Now, it might be that Indiana has a lower tax burden than its neighbors, I don’t know for sure, but it troubles me to have a governor who seems to believe that taxes should be raised as high as possible and without regard to voter intent or ability to pay. The message I read between the lines is: “Residents of Indiana are there to pay taxes if they don’t like it or think they are too high are cordially invited to leave the state.”

      So, I’ve stated some of the reasons why I’m unimpressed. Why do some consider himm a “rising star”? Is it just because he’s a little less terrible?

    2. Lexington Green Says:

      On, Wisconsin.

    3. onparkstreet Says:

      I had a grumpy “maybe I should move” day today but I’m still sticking with it for the time being….

      Shoulda gone home to the Hawkeye state maybe, after my sojourn in Boston-Brookline land….

      – Madhu

    4. Mlyster Says:

      Call me a traitor to the state of my birth, but: can’t wait to see Illinois business and its tax base eviscerated. While as a loyal Illini I’d rather poke myself in the eye with a stick than praise Wisconsin (!), GOOD for you, cheeseheads! And, well done Gov Walker et al.

      I left Illinois for Arizona last year, when I suddenly decided that I’d had enough, and that I had numerous alternate options. My work here is equally or more fulfilling (same career), with a substantially less insular and dependent mentality. Taxes lower; government less intrusive. People by and large are more selfreliant and at the same time more willing to lend a hand to their neighbor.

      Interestingly, the most common exceptions? California emigrees to western AZ. They are easy to spot: most obviously, they whine about EVERYTHING. A society of people who’ve never endured actual weather, in a society that expects ‘somebody’ to fix or to be responsible for everything they find even passingly inconvenient.

      I suspect more than a few businesses in northern Illinois will make the jump through the ‘cheese curtain’ to Milwaukee and its environs. Couldn’t happen to a more deserving Illinois.

    5. Bruno Behrend Says:

      Being a Mitch Daniels fan, I’ll take a shot at supporting the attack on him here.

      First, Daniels seems to be the only Republican I know of that doesn’t pander the the base by hyping tax cuts with out spending cuts.

      Frankly, someone ought to tell the true believers hawking their “tax cut” dogma that tax cuts without spending cuts is merely pork for Republican constituencies.

      Here is a simple 7 word mantra for you…

      “If you are spending, you are taxing.” Period. End. of. story. Take it to the effing bank!

      Hence, by being one of the few green-eye-shade Republicans, and holding down spending, Daniels is doing more to cut taxes than any supply-side Bozo touting tax cuts while bonding the state into oblivion. <—see "craven Illinois Republican" for that breed of skank.

      I hear conservative/libertarian heads exploding. “SUPPLY_SIDE BOZO!!!” Them’s fight’n words!!!

      Here’s the truth. Reagan cut taxes once. (good) Dropped rates in a revenue neutral reform once (good), and hiked taxes 5 times. (bad – and thus saving the welfare state) THAT’S why revenues were higher after 8 years. He also caved on Social Security, which was one of the largest tax increases in history at the time.

      Back to Daniels. I have no idea if he’s running or not, but he seems to be the only person in the nation who really gets it. He cut one of the worst taxes in world (property taxes), draining blood from the worst tumor in America – public education.

      He cut spending, put HSA’s in place for public workers, create access to health care for low-income workers (more HSAs) and (drum roll please…) revoked public worker’s collective bargaining rights on his first day as governor.

      But OH! He didn’t kowtow to the “business tax cut” crowd, which is made up mostly of rent-seeking blue blood corporate weenies who would sell their mothers for a tax subsidy and protection from competition.

      Sorry to be so blunt John, but it’s time we had a president that understood the meaning of a budget. I measure my support for Republicans by how much they understand the dynamics of spending, and Daniels seems to be one of the few who gets it.

      I hope he runs, and (for now, anyway) I hope he wins.

    6. Dan from Madison Says:

      Well Bruno beat me to that defense of Daniels, of whom I am having the pleasure to read about more and more.

      I was of the opinion that I was rooting for Illinois, that a healthy Illinois is better for the entire Midwest, etc. But now I have been thinking about that stance and my new tack is “f!ck em”. That state has been a joke for decades now and in the last election what did the people do? Same ‘ol, same ‘ol. Wisco might as well get as much as we can rather than AZ or TN or (insert better state here).

      Like Mlyster, I too am a native son of Illinois, went to the U of I and will still cheer our football teams. And I really, really wish the state would come around. But you can take that mess for now, and shove it.

    7. Dan from Madison Says:

      And Madhu, think about Wisco if you ever decide to get out. The people here are super nice, although we have our nuts and flakes here in Madison. Drop me a line if you want a tour of the city – for all of its quirks it is a pretty high quality of life.

    8. tehag Says:

      Wonderful. Will the incoming Illinoisians do the jobs Wisconsians won’t do or will they steal jobs from Wisconsins? (It’s not as silly as it sounds.) If I owned a business in Wisconsin and had a competitor in Illinois to whom the governor gave a competitive advantage for two years, I’d be hacked at the showboating *******. Ah, well, the honest and true, who have made jobs for Wisconson all these years will be forgotten. New is exciting; the steady and true, dull. Still, were I that Wisconsian business owner, this would be the last time I voted for “free-market” politicians.

    9. Dan from Madison Says:

      Actually Tehag the incoming Illinois businesses will provide jobs that are not currently available and that does nothing but help the state’s economy. Wisconsin’s manufacturing base is very small now and could really use a shot in the arm. And if you own a business and are scared of compitition, well I guess you are in the wrong field.

    10. Shannon Love Says:

      Dan From Madison,

      And if you own a business and are scared of compitition, well I guess you are in the wrong field.

      I think you are off mark here. Getting a preferential tax rate is economically identical to getting a direct subsidy. Individuals and business can justly complain if their competitors are given a subsidy by the state. Even when the competition isn’t direct, it is still true that those who pay a tax subsidize those who do not. Renters subsidize homeowners who get mortgage deduction.

      Non-localized businesses like manufactures with a national or international customer base have less to worry about than highly localized businesses, such as restaurants, but they still have to pick up the part of the tab for the priviliaged businesses.

      I think tax breaks to draw businesses is a bargain. I think it a variant of Keynesian stimulus theory. It’s better for a community to offer low taxes, minimal interference and efficient government services and let the chips fall where they may.

    11. Lexington Green Says:

      The tax break basically covers the moving cost, or partly so.

      This is a nudge, at the margin, to get Illinois businesses to relocate.

      Also, it is a publicity stunt. Which is working.

      If the long term prospects in Illinois and Wisconsin were the same this would do nothing.

      The prospects are not the same. Illinois looks like a bad bet as far as the eye can see.

    12. John Says:

      “If you are spending, you are taxing.” Period. End. of. story. Take it to the effing bank!”

      I couldn’t agree with you more! Absolutely. But I would add, “If you are taxing, you are spending.” which is nearly as certain.

      Back to Daniels. I have no idea if he’s running or not, but he seems to be the only person in the nation who really gets it. He cut one of the worst taxes in world (property taxes), draining blood from the worst tumor in America – public education.

      I disagree completely here. Events were confusing and drawn out, but the best I can tell he was dragged kicking and screaming into moderating increases on some people’s property taxes. (Mine went up 88%.) See below about education.

      But OH! He didn’t kowtow to the “business tax cut” crowd, which is made up mostly of rent-seeking blue blood corporate weenies who would sell their mothers for a tax subsidy and protection from competition.

      Mere name-calling. Still, no one has offered one shred of evidence that if I start growing vegetables in my yard my negative impact on society doubles, and if I start selling them it triples. How is it a subsidy and protection from competition to ask that all taxes on property be uniform (preferably low or non-existent)?

      Sorry to be so blunt John, but it’s time we had a president that understood the meaning of a budget. I measure my support for Republicans by how much they understand the dynamics of spending, and Daniels seems to be one of the few who gets it.

      I agree with regard to the meaning of a budget, but would add “and is willing to respect it and his constituents.” I don’t doubt Daniels understands budgets, I just don’t believe he is sincere.

      Just as one example, what do you make of a statement like this:

      I looked hard at the idea of totally eliminating property taxes in our state. Much as I would like to have taken that route, the risks to our schools, to small business, and to our economy generally, dissuaded me. In particular, I could not support the large increase in personal income taxes, paid by every Hoosier worker and most small businesses, which would be necessary for total elimination.

      So, he asks us to believe that the spending is unalterable, therefore a reduction must be paid for by an increase in taxes elsewhere. He asks us to believe that lowering taxes is somehow a risk to small business, an extraordinary claim. He presumptively sells the idea that an income tax increase is the only alternative. Worst of all, he says he can not support the increase in income taxes which would be caused by eliminating property taxes (while holding spending steady or increasing apparently). Money is fungible. The main issue is the overall tax burden, driven by overall spending. The secondary issue is that property taxes are probably the worst form of taxation we endure. He responds by arguing for property taxes because without them the overall tax burden will increase?! Clearly he believes that there is something special about property taxes which disturb the fungiblity of the revenues therefrom….

      So, what is the difference between paying $2000 more in income taxes (or sales taxes, or user fees, or name it) and paying $2000 in property taxes? There is one very real difference: In an economic downturn either general or personal, one’s income drops, one cuts back on spending (sales tax), then revenue to the state drops, meaning that both the tax payer and the government have to tighten their belts. Whereas a property tax will simply increase and the taxpayer must pay or lose their property. The worst thing about a property tax is that it destroys the freedom to simply be left alone, the second worst thing is that it gives the governance no incentive to fiscal responsibility.

      It also doesn’t sound very much like he’s interested in draining blood from the public schools, that is the first concern he mentions. Here’s another quote:

      “No part of government in the state has been so fortunate as K-12 education. Everything else has given far, far more, and that’s the way we want to keep it,” Daniels said. link

      This guy is just plain not leveling with us.

    13. Purpleslog Says:

      I like this phrase –> “the cheddar curtain”.

    14. Shannon Love Says:

      In my previous post this:

      I think tax breaks to draw businesses is a bargain.

      … should have read:

      I think tax breaks to draw businesses is a fool’s bargain.

      Kinda screwed my entire meaning there.