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Chicago – “Corporate welfare handouts are not only the antithesis of free markets, but the enduring legacy of state-provided subsidies are the numerous short-term unseen costs and long-term unintended negative consequences that develop from politicization,” said Jared Labell from Taxpayers United of America (TUA).
Politicians are uniquely skilled at giving away other people’s money – that is, the taxpayers’ money. Your money. As the much anticipated bread and circuses otherwise known as the November 4th election approaches, for the taxpayer’s of Illinois, it also means that bureaucrats like Gov. Pat Quinn and U.S. Sen. Dick Durbin are expropriating more taxpayers’ wealth on behalf of some of the most profitable businesses in the country, and to the detriment of everyone else.
“Targeted-benefit policies are damaging for a variety of reasons. Such policies encourage businesses to misallocate resources and incentivizes them to engage in what is referred to as rent-seeking behavior. In their attempt to obtain benefits by tipping the balance of competition through political means, rent-seeking businesses handicap competitors with the force of the state. Nothing yields more cronyism like financial connections between those that beg for corporate welfare and the bureaucrats and the political class who enable them.”
As the news broke earlier this week that Amazon.com, the largest U.S. e-commerce retailer, is planning to open its first facilities in Illinois, it didn’t take long for skeptical onlookers to wonder just how much of the bill they would be paying with their tax dollars and to what benefit.
Joe Cahill of Crain’s Chicago Business immediately scolded Gov. Quinn and U.S. Sen. Durbin for perpetuating the cronyism of state-subsidization, detailing multiple recent accounts of millions of taxpayer dollars being transferred to politically connected corporations, many of whom already had logistical reasons to be in, or remain in, Illinois. Mr. Cahill put it well when he said that, “Mr. Quinn spent taxpayer money to get something Illinois would in all likelihood have gotten anyway. I don’t know if it will get him re-elected. But I do know it’s bad policy.”
“Corporate welfare is absolutely bad policy,” said Labell, “as economists Christopher Coyne and Lotta Moberg explained in their working paper The Political Economy of State-Provided Targeted Benefits earlier this year for George Mason University’s Mercatus Center.
“They open with the observation that, “The governments of American states often attempt to incentivize businesses to locate within their borders by offering targeted benefits to particular industries and companies. These benefits come in many forms, including business tax credits for investments, property tax abatements, and reductions in the sales tax.” The unforeseen costs of such government intervention is apparently lost upon politicians like Quinn and Durbin,” added Labell.
“A system of cronyism cannot be institutionalized instantaneously. People respond slowly to labor-market demand, and it may take many years for rent-seeking to become professionalized. Once it is in place, however, cronyism is hard to root out precisely because those involved in it have an incentive to perpetuate it,” Coyne and Moberg continued.
These practices are increasingly resembling those of other countries with historically corrupt systems. Coyne and Moberg conclude that, “The best we can do to prevent that from happening is to detect the policies in our political system that are contributing to this negative trend and end them.”
“Politicians like Quinn and Durbin propagate the demonization of the free market while they perpetually act in every manner possible to undermine it with their cronyism and corporate welfare handouts, said Labell. “The taxpayers of Illinois should reject these two political hacks, or ‘corporate welfare whores,’ and demand that the government stop intervening in the economy on behalf of politically well-connected corporations so that we can begin to have something even approaching a truly free market.”
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Chicago – Illinois political hack Richard J. “Dick” Durbin (D) has been in the U.S. Senate seventeen years too long. Time and time again for nearly two decades, Durbin has failed to reconcile his occasional calls for moderate government reforms with his overall track record of encouraging the growth of the size and scope of the government at every level. Perhaps even worse, he plays politics with his voting record on the most important of issues.
Durbin boasts that he voted ‘Nay’ on the National Defense Authorization Act (NDAA) for Fiscal Year 2012, which Pres. Obama signed into law on Dec. 31, 2011. Inserted into the annual legislation which specifies the budget and expenditures for the Department of Defense, one of the most controversial new subsections authorizes the indefinite detention of individuals by military personnel without due process, regardless of their legal status or their location at the time of rendition.
“According to an analysis by the ACLU, this act codifies into law indefinite military detention without charge or trial for the first time in American history,” said Jim Tobin, President of Taxpayers United of America (TUA).
Although Durbin voted against the 2012 NDAA and the 2013 NDAA, he cast a ‘Yea’ vote for the 2014 NDAA, which at present still contains the provisions permitting the indefinite detention of individuals without trial. Durbin also voted ‘Yea’ for the 2001 Authorization for Use of Military Force (AUMF), enabling the endless wars and lawlessness both abroad and at home for the past thirteen years. Unfortunately, the NDAA for Fiscal Year 2015 will almost assuredly pass again sometime in December 2014, as it has for more than five decades.
And worse yet, for more than a year and as recently as last month, Durbin has advocated rewriting the AUMF with even broader authorities, perhaps encompassing or exceeding those provided by the current NDAA he claims to oppose.
“The NDAA detention subsections are not limited to people captured in an actual armed conflict, as required by the laws of war,” continued Tobin. “As the ACLU stated, ‘There is substantial public debate around whether the NDAA could be read even to repeal the Posse Comitatus Act and authorize indefinite military detention without charge or trial within the United States.’ How Durbin will vote this time is anyone’s guess, but his voting record does not match his supposedly stalwart opposition to such tyrannical government legislation.”
“That Durbin would play politics with such an alarming expansion of government power is revealing of Durbin’s mindset, not to mention his knack for political posturing, claiming to be against the legislation while helping retain it as law. Durbin is the epitome of the D.C. Establishment.”
Concluded the ACLU: “The provisions – which were negotiated by a small group of members of Congress, in secret, and without proper congressional review – are inconsistent with fundamental American values.”
“Durbin has been in office far too long, and he needs to go,” Tobin emphasized. “He is a rabid supporter of big government, big spending, and eroding civil liberties, and is therefore a threat to everyone’s liberty and their wallets.”
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Chicago – Taxation serves one purpose only: to grow government, according to Jim Tobin, noted economist and president of Taxpayers United of America (TUA).
“Government bureaucrats are always looking for ways to get more of your hard-earned money. God forbid you choose to smoke in Chicago. You now have to pay $7.17 in taxes for each pack, the highest rate in the country,” added Tobin.
“Bureaucrats love to tax vices; they are such an easy target. They sell outrageously high taxes on things like cigarettes as ‘the responsible thing to do’ – and people soak it up!”
“Government taxes for one reason only – to grow and sustain government. Government is not altruistic and does not have any interest in reducing the rate of smokers. They would lose too much revenue if everyone actually quit smoking.”
“When taxes like those on cigarettes are sold as a deterrent to high-risk behavior, it is simply a marketing strategy to easily pass a tax increase. The bureaucrats rely on the naiveté of their constituents.”
“The reality is that increasing taxes locally drives business to neighboring communities. In the case of cigarettes, you create a significant black-market opportunity. Cook County Sheriff, Tom Dart, attributed the lower than anticipated cigarette tax revenue to the growing black market cigarette operations throughout Chicago and Cook County.”
“The real issue is, why do we need to keep increasing tax revenue? The answer is simple. Pensions. The government pensions are the real budget drain. 75% to 80% of local taxes go to pay government employee salaries and benefits, and that doesn’t include the state pension funds. But it does include the municipal police and fire pensions in most cases.”
“The State of Illinois and many of the communities within are in dire financial straits because of the gold-plated pensions that have been promised to the government employees. It is mathematically impossible to tax your way out of the problem, however, the bureaucrats will try with all their might.”
“Government budgets across the state are hurting and they will seek to tax everything that moves, if they have Home Rule taxing powers, although cigarettes are so special they can be taxed even without Home Rule authority.”
Home Rule gives local government the authority to increase taxes or create new taxes, with very few limitations, without a referendum. There are approximately 150 Home Rule units in Illinois.
“I caution everyone to be diligent in monitoring the activities of the Home Rule unit governing bodies. As state money decreases, local governments will be looking to increase revenue through Home Rule taxes.”
“This is a great time to repeal Home Rule. As a matter of fact, TUA has been contacted by activists in 3 Home Rule communities to help them launch a campaign to repeal Home Rule.”
