Carl from Chicago

Business executive interested in history, economics, taxation and energy policy.

Urban Renewal In Chicago

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In today’s Chicago Tribune real estate section there is an “article” titled “Into High Gear – Redevelopment puts Motor Row in fast lane among city neighborhoods”. Motor Row is an area south of the loop and north of US Cellular Field. At one time the car dealers for Chicago all located their shops in this neighborhood, hence the name. Now, like most of the other areas near the loop, it is being gentrified, hence being worthy of an article in the Tribune. Per the article:

“The people we knew in the suburbs were looking at us like Martians when we told them we were moving out here” Franco Lanzi said. “It is a bet right now. A few years ago, this was NOT A PLACE WHERE ANYONE WOULD WANT TO LIVE” (capital letters are mine)

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Better Greenery Through Tax Minimization

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Hardly a month goes by without an IKEA catalog showing up on my door. For those that haven’t been to an IKEA store, they are immense “destination” stores full of low priced furniture and other household items. IKEA is famous for its “green” activities; you can hardly walk without a placard explaining the pristine source of its raw materials and how they are operating in a sustainable fashion. Here is an article from their Seattle store lauding their commitment to the environment. I’d quote from the article but it is the usual “commitment” gibberish and not particularly enlightening.

One of the core elements of the environmental movement is a huge governmental role in the economy; we need to put taxes on activities that are not viewed as beneficial and an army of lawyers and regulators to ensure that “Big Business” doesn’t run roughshod over ma’ nature. In my experience a libertarian philosophy and serious environmentalism have very little in common.

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America’s Corporate Tax & Market Distortions

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One of the most troubling failures of the Republican led congress (which is no more) is their failure to substantially reform the US corporate tax code. I wrote an article that summarizes how the corporate tax is applied at an overview level and the fact that today the US is among the least competitive corporate tax regimes among developed countries. The Economist recently chimed in, too, with an article titled “Tax Reform – Overhauling The Old Jalopy” which does a decent job of summarizing the situation and stating that an average tax rate of 27% without major deductions would accomplish the same thing as our current tax rate of 34%. Not mentioned by the Economist is how this backfired on us with the Alternative Minimum Tax, when a simplified tax methodology with lower rates and a broadly applied based ended up netting millions of middle Americans, including the middle class.

All of these articles miss a more troubling trend, however – the issue isn’t as much the tax methodology applied to EXISTING companies (who have strong incentives to stay in place) but how the tax impacts NEW companies that are choosing where to set up shop and what sort of structure to utilize for their business. This photo is a cornerstone of the Accenture “Headquarters” in downtown Chicago – Accenture is the surviving consulting firm from the Arthur Andersen debacle (grist for a future post as I am an alumni) that chose to locate their headquarters in Bermuda rather than the United States, primarily to minimize their income tax burden.

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Chicago Or Dubai?

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Any architecture buff can tell you about the historical firsts for the city of Chicago. The “Chicago School” of architecture included famous buildings like the Monadnock building, one of the tallest masonry structures in the country, and the Auditorium Theater.

In the popular imagination the Sears Tower, which reigned as the tallest building in the world, and the John Hancock building, with its “X” style external beams, are iconic to the city. The Aon Building, formerly the Amoco Building, is a 90 plus story white classical tower, and the Smurfit-Stone building, with its angular (not quite matching) slanted glass roof.

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