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Why Would You Do Business in Chicago?

September 19, 2012 by Robert Asahina
Illinois is a state “where it’s hard to compete,” says the Honorable Aaron Schock, the youngest member of Congress, who represents the 18th District of Illinois. Speaking as a panelist on Tuesday at the Bush Institute’s conference in Chicago on “Tax Competition and 4% Growth,” Schock said business leaders tell him, “I can’t operate in this state for what I could operate in other states.”

To Ike Brannon, Director of Economic Policy and Congressional Relations at the American Action Forum and a Bush Institute Fellow, the problem is that, when it comes to taxes, the “person who is actually writing the check is not bearing the cost” — something that legislators forget in their confidence that raising corporate taxes can solve short-term budget and long-term debt problems. The real cost is shared by shareholders, customers, and workers. And government, under the pressure of too many competing interests, uses tax policy to “reward friends and punish enemies” on political rather than economic grounds. The result is depressed productivity and lower job growth, which in turn lead to lower tax revenue, while long-term debt accumulates. This “death spiral” of ever “higher taxes and higher unfunded liabilities” makes Illinois the “worst place to do business,” according to Brian Wesbury, Chief Economist, First Trust Advisors L.P., and a Bush Institute Fellow. Wesbury warned that the credit default spread in Illinois — the cost of buying insurance on a state-issued bond — is “approaching the level of Greece and Spain a few years ago.”


Author

Robert Asahina

Robert Asahina has been a newspaper and magazine editor and writer, a book publishing executive and editor, and a data management consultant. He was editor in chief and deputy publisher of Broadway Books, president and publisher of the adult publishing group of Golden Books, and vice president and senior editor of Simon and Schuster; deputy managing editor of The New York Sun and an editor at The New York Times Book Review, Harper's, George, and The Public Interest; and a consultant at Freddie Mac. He is the author of "Just Americans" and of numerous articles and reviews for The Wall Street Journal, Harper's, The New York Times Book Review, and elsewhere.

 

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