BRING BACK

BLUEPRINT
Corporate Welfare Reform
2014
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TABLE OF CONTENTS
1. REFORM ECONOMIC DEVELOPMENT TAX
BREAKS
2. CLOSE SPECIAL INTEREST LOOPHOLES
THE QUINN-MADIGAN WAY
The hardworking taxpayer is the most under-represented, forgotten
person in Illinois today. Every special interest has its lobbyists but no
one speaks or ghts for the people who work hard every day and play
by the rules.
Springeld likes to raise taxes on working families, the middle class
and small businesses and then give special breaks to a select few,
often big corporations and those who can afford high-priced lobbyists.
Pat Quinn and Mike Madigan encourage it.
They raised taxes on all families by 67% but give out hundreds of
millions in special handouts each year. And deep in our tax code are
perks and breaks for business interests.
Gov. Quinn promised to eliminate corporate giveaways
1
, but failed to
deliver. Its time to stop rewarding the lobbyists and special interests
and start respecting hardworking taxpayers. Five years of Gov. Quinns
failed leadership has resulted in tax breaks for companies that lay off
workers, record spending, cuts to education and a higher tax burden on
working families.
This is Pat Quinns Illinois Springeld insiders win while Illinois
families and small businesses lose. It just isnt fair.
We need reforms that end the giveaways and government shakedowns.
This section of the Bring Back Blueprint is the third rollout of
structural reforms to shake up Springeld. We need to fundamentally
change how Springeld does business with businesses.
1 Ameet Sachdev and Alejandra Cancino, Business tax breaks under states microscope, Chicago
Tribune, March 3, 2012
Illinois businesses reap
huge tax breaks.
- ASSOCIATED PRESS
May 21, 2011
Corporate Incentives Come
Under Scrutiny inIllinois.
- CBS
Dec 16, 2014
Higher Taxes, More Breaks.
- CHICAGO TRIBUNE
Feb 17, 2013
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1. REFORMING ECONOMIC DEVELOPMENT TAX BREAKS
According to the Illinois Comptroller, in 2013 the state spent more than $500 million in economic development
incentives an increase of more than $100 million from the previous year.
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Despite these tax breaks, Illinois still has
one of the highest unemployment rates in the nation.
3

Reform EDGE Tax Credits
One of the most well-known tax breaks is the Economic Development for a Growing Economy Tax Credit (EDGE)
program. The EDGE program allows a non-refundable credit against income tax liability based on the tax revenue
generated by new or retained employees.
Quinn and Madigan have damaged the states job climate so much that they are now throwing millions of taxpayer
dollars at corporate interests even if it means more layoffs. Since the EDGE program was created in 1999, the state
has pledged more than $800 million in tax incentives to about 300 companies. Nearly half of those pledges were
made in 2011 and 2012.
4

Things are so bad under Pat Quinn that in his rst years as governor he shifted the EDGE program from job creation
to job retention with 5,709 claimed jobs created to 22,610 jobs retained.
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Worse, there are numerous examples of taxpayer funds committed to companies that hired zero workers, or even
red employees.
A few examples include:
SEARS RECEIVED $150 MILLION IN TAX BREAKS, BUT COULD FIRE NEARLY 2,000
EMPLOYEES AND STILL REMAIN ELIGIBLE FOR STATE FUNDS.
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CHRYSLER GROUP LLC NEGOTIATED A 20-YEAR DEAL THAT DOES NOT REQUIRE IT
TO CREATE ONE JOB
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Alarmingly, there are no limits on the number of job retention deals. Quinn and Madigan are picking the winners
and taxpayers are the losers.
2 Illinois Comptroller Tax Expenditure Report, 2013
3 U.S. Bureau of Labor Statistics, Date Accessed May 23, 2014
4 Alejandra Cancino, Illinois lawmakers to discuss future of tax credit program, Chicago Tribune, Jan. 12, 2014
5 Alejandra Cancino, States Economic Development for a Growing Economy program more about maintaining than growing jobs, Chicago Tribune, Nov. 6, 2011
6 Jamey Dunn, Sears tax break allows for layoffs, Illinois Issues, Feb. 16, 2012
7 Alejandra Cancino, Illinois corporate tax credits swelled to $161 million in 2011, Chicago Tribune, Feb. 17, 2013
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TOTAL VALUE OF TAX CREDIT CERTIFICATES BY YEAR
Scale in millions
$160
$140
$120
$100
$80
$60
$40
$20
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
- SOURCE: Chicago Tribune, Feb 17, 2013
Quinn has also created a second special class of EDGE incentives that
provide credits against payroll withholdings. To date, nine companies
have received this special perk, including companies like Chrysler Group,
Ford Motor Company, Mitsubishi Motors North America, Navistar and
Sears Holdings.
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In order to be competitive, Illinois needs predictability and a level playing
eld in economic development incentives. And in order to be fair to the
average taxpayer, companies that are not creating new jobs should not
leave our taxpayers footing the bill for their insider deals.
8 Illinois House Revenue and Finance Hearing Handout, Illinois Department of Commerce and
Economic Opportunity
Companies qualify for
millions of dollars in
incentives despite laying off
hundreds or failing to create
jobs, critics say.
- CHICAGO TRIBUNE
Jan 12, 2014
Sears lays off 100 at Illinois
headquarters, two months
after getting state tax credit.
- ASSOCIATED PRESS
Feb 16, 2012
More than half the money
Quinn has pledged through
May would aid companies
that are not required to
create a single job
- CHICAGO TRIBUNE
Nov 6, 2011
Illinois among states doing
little to no evaluation of tax
breaks effectiveness.
- ASSOCIATED PRESS
Apr 12, 2012
2011
$161.1 MILLION
8.5% of state corporate tax revenue
2011
167
8.5% of state corporate tax revenue
#of Certicates Awarded
Some companies have multiple deals which allows them to
collect more than one tax break certificate
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Rauner Reforms: The EDGE tax credit program is broken and in need of reforms that make it accountable and fair. Illinois
should cap the job retention tax credits program in order to halt Gov. Quinns practice of rewarding companies that lay off
workers. Bruce also will veto any future special EDGE deals that funnel taxpayer dollars to a select few corporations.
2. CLOSE SPECIAL INTEREST TAX LOOPHOLES
The Illinois tax code is lled with numerous exemptions, deductions and special carve outs that favor a select few at the
expense of taxpayers.
THESE LOOPHOLES INCLUDE:
Big Oil Loophole
Illinois excludes corporate income generated in the outer continental shelf effectively treating U.S. property as
foreign lands.
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This loophole allows oil companies with a presence in Illinois to drill offshore and not pay Illinois
taxes on that income. Gov. Quinn proposed closing this loophole as part of his FY2013 budget, but he failed to deliver
for the taxpayers of Illinois.
Rauner Reforms:Oil companies should pay their fair share of taxes, particularly as we dig out of the budget hole that
Gov. Quinn created. Closing the Big Oil loophole could generate $75 million.
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Repeal Non-Combination Rule
State law requires most companies to combine related companies tax liabilities. The purpose for this is to prevent
corporations that act as unitary businesses from reducing their tax liability across afliates. However, nancial
institutions, transportation and insurance companies are subject to what is known as the Non-Combination Rule which
excludes them from this process.
Rauner Reforms:Repeal the non-combination rule and establish legislative guidance for new apportionment formulas
to ensure the state has no carve outs for particular industries. Approximately $25 million could be saved.
9 Sophia Tareen, Quinn proposes taxing offshore oil companies, Associated Press, February 22, 2012.
10 Gov. Pat Quinn, FY2013 Budget Address
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Race Horse Loophole
If you purchase a vehicle in Illinois, you have to pay the state sales tax, which is often thousands of dollars. But if you
race or breed horses for use at Illinois horse tracks, you get a special perk an exemption from the state sales tax.
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These race horse owners have the potential to win twice once in the winners circle and again on a tax form.
Rauner Reforms:Close the race horse sales tax loophole. The vast majority of Illinois families do not own a race horse
it is unfair to ask them to pay for someone else owning one.
Tax-Free Jets and Yachts to Spouses Loophole
Individuals who purchase or receive a private jet or yacht as a gift or in a will have to pay a 6.25% Aircraft or
Watercraft Use Tax. But under Illinois law, a wealthy family can avoid the 6.25% use tax if the jet or yacht is willed to
a surviving spouse.
Rauner Reforms:We should close the Aircraft and Watercraft Use Tax Exemptions for spouses.
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The tax already is
extended to other family members. Illinois families without a jet or yacht shouldnt be on the hook for the tax bill for others.
Newsprint and Ink Loophole
Under Gov. Pat Quinn, the State of Illinois exempts newsprint and ink from the sales tax. This cost taxpayers $32
million in 2012 alone.
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Rauner Reforms:As more and more individuals get their information online, antiquated protections for media
conglomerates should be eliminated. Taxpayers dont have the lobbyists that media companies do - we should close the
Newsprint and Ink Loophole.
Paid for by Citizens for Rauner, Inc
11 35 ILCS 120/2-5 (27)
12 35 ILCS 157/10-15(iv), 35 ILCS 158/15-10(iv)
13 Illinois Commission Government Forecasting and Accountability, Illinois Tax Incentives, January 2014