An astounding withholding tax twist

This could give the term corporate tax an entirely new meaning .The State of Illinois is now allowing certain corporations to keep their employee’s state income tax withholding for ten years. Recent Illinois legislation allows chosen companies to retain all of the income taxes withheld from new hires that expand payroll and half of the taxes for existing workers whose jobs are retained.



Moveon.org has a video (via Atrios) and here is an earlier article by David Cay Johnston.

The Illinois deal shows how competition between the states, and with other countries, helps big corporations wring subsidies from state governments even as the states are being forced to fire teachers and other public workers because of a weak economy that has cost jobs and tax revenue.

Why would the state let companies do this? Most big companies pay little or no state corporate income tax, because companies arrange to take expenses in higher tax states and profits in states with little or no corporate income tax. So the only way to finance incentives without the state writing a check is to let the companies pocket their workers’ state income tax.

However while diverting tax taxes from public purpose to private use the State of Illinois is deep in red ink juggling its own finances. Turns out they are having trouble paying their bills. Three years ago they had a two week turn around on state payments now late payments are the norm. In order to handle budget shortfalls they are deliberately delaying billions of dollars worth of payments for months at a time .The AP found almost half the outstanding sum was more than a month overdue.

It’s hard to imagine any corporation operating here in Vermont ever being shy in the endless effort to get what they must see as only their fair advantage (example here) - so it’s hardly out of the question this scheme in some form might not be lurking in our own future debates.

IBM:big,blue and chips on its shoulders

IBM in Vermont is again crying crocodile tears and threatening to hold its breath until it turns blue. Well it isn’t IBM precisely but a surrogate croc. Leave it to Vermont millionaire businessman Jack McMullen’s fine tuned political instincts to pen an op-ed regurgitating the time worn “ IBM- may- leave- Vermont- if…” line at the very moment the Occupy Wall Street movement seems to be peaking.


59 percent of adults either completely or mostly agree with the OWS protesters according to an October National Journal survey reported by Atlantic Magazine. Also sympathy toward corporations is low as shown by a Sept. 2011 Gallup poll indicating 70 percent of respondents favor hiking taxes on corporations by eliminating tax deductions.


But with bullet point efficiency McMullen sobs out the alleged historic wrongs inflicted on poor IBM by mean old Vermont.

• you never gave us the circ highway you promised,
• you never got us the low power rate we wanted,
• you never gave us relief from act 250 ,
• you never gave us assistance in training insufficiently prepared new workers

Ah, but it’s his justification for an emotional tender spot that long ago bruised the fragile corporate heart that dredges up the grandest crocodile tears. Millionaire and failed US Senate candidate McMullen recalls the time Bernie Sanders actually *gasp* publicly criticized IBM.

Says McMullen:

Its eventual extinction will have been caused in large part by the failure of political leaders to respond to clear signals from the largest private, taxpaying employer our state is ever likely to have.

In the 1990s, then-Congressman Sanders launched a very public campaign [supporting IBM workers who were] criticizing IBM for [unilaterally] changing its 1960s-era pension plan to remain competitive with nimbler, newer entrants into the semiconductor business.
I am told by the same source [an unnamed most senior IBM corporate executive] that IBM’s then-CEO, Louis Gerstner, reacted to Sanders demagoguery with a statement something like: “Don’t the politicians in Vermont realize there are more than a dozen other states vying for our business?”

So take it from businessman Jack McMullen, the man who lost a shoo-in Republican primary to Vermont farmer Fred Tuttle, that IBM feels pain at not getting what they want.


Who doesn’t, eh Jack? On the other hand, many go forward to other goals or find ways to compromise for the mutual good of the community, while others clutch old grudges, keep crying and holding their breath to get attention.

Lions,tigers and bears killed in Ohio

I heard about this early this morning and assumed it was some kind of joke or early morning radio prank. Forty eight animals were shot by law officers after escaping through open gates at a private exotic animal preserve. Eighteen tigers,seventeen lions three mountain lions six black bears, two grizzlies and a baboon. According to authorities a gray wolf and monkey are on the loose. The monkey may be carrying a virus.
The former Democratic governor had issued an executive order that might have closed the zoo but it expired under when the new governor a Republican took office. The rules are now under review again.

The order might have forced [zoo owner]Thompson to surrender his menagerie, said Wayne Pacelle, president and chief executive of the Humane Society of the United States. Bill Damschroder, chief counsel for the Ohio Department of Natural Resources, said the order was unenforceable and that the Kasich administration is developing a law to regulate the ownership of wild animals. The Zanesville incident likely will speed its passage, Rob Nichols, a Kasich spokesman, said by phone.