Saturday, January 21, 2006
Part III– Daily Herald Questionnaire – Pension Management, Business Climate
Just what part do low income tax rates play in economic development?
In 1994, I had long had the suspicion that people who can put plants anywhere they want to cared more about their personal income tax rates and the corporate tax rate. When Motorola CEO Chris Galvin announced the Harvard plant, he said part of the reason was that the corporate income tax rate was lower in Illinois than in Wisconsin.
But corporations in Illinois don’t really pay very much income tax. In the early 1970’s, businesses paid about 22% of the total income tax bill. Now, it is down to 12-13%.
When I got the opportunity to be briefed by the 7-8 division leaders of a robust Motorola at its Libertyville cellular plant, I jumped at the opportunity. After the presentations, I asked by question. I told them my hypothesis of folks like themselves being more interested in the personal income tax rate than the corporate rate when deciding where to put a new plant. Was it true?
The reaction I got was a string of really broad smiles confirming my suspicion.
To return to McHenry County Blog, click here. http://mchenrycountyblog.com
In 1994, I had long had the suspicion that people who can put plants anywhere they want to cared more about their personal income tax rates and the corporate tax rate. When Motorola CEO Chris Galvin announced the Harvard plant, he said part of the reason was that the corporate income tax rate was lower in Illinois than in Wisconsin.
But corporations in Illinois don’t really pay very much income tax. In the early 1970’s, businesses paid about 22% of the total income tax bill. Now, it is down to 12-13%.
When I got the opportunity to be briefed by the 7-8 division leaders of a robust Motorola at its Libertyville cellular plant, I jumped at the opportunity. After the presentations, I asked by question. I told them my hypothesis of folks like themselves being more interested in the personal income tax rate than the corporate rate when deciding where to put a new plant. Was it true?
The reaction I got was a string of really broad smiles confirming my suspicion.
To return to McHenry County Blog, click here. http://mchenrycountyblog.com
# posted by Cal Skinner : 5:12 AM
