Union-backed group says state spending, not tax cuts, helps business

Ben Yount
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Apr 09, 2014 5:00 AM
Union-backed group says state spending, not tax cuts, helps business

By Benjamin Yount | Illinois Watchdog

SPRINGFIELD, Ill. — As Illinois stumbles toward three possible tax increases, a union-backed tax group says any one would be better for small businesses than a tax cut.

TAX TALK: If lower taxes don’t create jobs, how can higher taxes help?

“It matters, particularly for small businesses, to invest in education,” said Ralph Martire, who heads the Center for Tax and Budget Accountability. “Small businesses hire primarily from the local labor market. They need their local schools to produce quality workers with literacy and numeracy skills.”

Martie says Illinois cannot pay more for education if the state rolls back the 2011 “temporary” tax.

It’s less than surprising that Martire supports a tax increase for more school spending. Illinois’ major labor unions have funded the CTBA, and many union leaders sit on the group’s board of directors.

Martire argues that most businesses in Illinois do not need the corporate tax relief that would come by allowing the 2011 “temporary” tax to expire.

“Most businesses don’t pay the corporate income tax at all,” Martire said at the statehouse Monday. “The vast majority of businesses in Illinois that file an income tax return, almost 70 percent, paid $0 in corporate income taxes … Only 5  percent of all businesses in Illinois have corporate tax liabilities exceeding $10,000.”

Martire said more businesses in Illinois would be helped by property tax cuts, not by corporate income tax relief.

MORE SPENDING, NOT FEWER TAXES: Martire — unsurprisingly — says more spending is the answer to stagnant job creation.

But Kim Clarke Maisch, Illinois state director of the National Federation of Independent Businesses, said, “Taking money away from people who create jobs, however that happens, is not going to create jobs.”

Maish said Martire’s study completely ignores the reality that most small businesses file taxes under the personal income tax structure, which could raise the tax rate for small businesses to almost 10 percent.

“While lowering taxes, in his opinion, doesn’t create jobs,” Maisch said. “Raising taxes certainly doesn’t create jobs, either.”

Maisch said if Martire, or the big labor unions that support him, want to have a “fundamental discussion about tax policy,” then she’s all in.

But Maisch said Illinois would then have to look at workers’ compensation reforms, tort reforms and other aspects of job creation that Illinois’ labor unions have long fought.

Contact Benjamin Yount at Ben@IllinoisWatchdog.org and find him on Twitter @BenYount.