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"Every year, the state of Illinois
provides over $1 billion in 42 different corporate tax breaks and
credits. Every year, some of those loopholes help some companies
avoid paying their fair share of taxes, which means hardworking men
and women have to make up the difference," the governor said.
"Despite the fact that the hardworking people of this state are
subsidizing some of our biggest and most profitable corporations,
the very people who pay taxes are prohibited by law from knowing who
is getting the benefit of these tax breaks and how much they're
getting. If the people of this state are going to pay for tax breaks
for big corporations, they ought to at least know what they're
paying for and what they're getting for their money."
The governor pointed to the state's
historical revenue statistics, which indicate that in 1980 one in
every five income tax dollars in Illinois was paid by corporations.
In fiscal 2003, corporations paid only one of every eight dollars in
income taxes. And in fiscal 2005, the ratio is expected to drop to
one of every nine dollars. Of the 95 Fortune 100 companies that are
doing business in Illinois, 30 paid no state income taxes at all in
2002. Twelve others that did pay taxes in 2002 paid no state income
taxes in 2000 or 2001.
The legislation announced by Gov.
Blagojevich would require publicly traded companies, insurance
companies, banks and privately held corporations with assets over
$100 million to disclose to the Department of Revenue the income
taxes they pay to the state and the loopholes they use to reduce
their taxes. The department would then make that information
available to the public.
In addition, the proposal would require
administrative hearings at which corporate taxpayers' challenges to
the tax code be made public.
Other states have corporate tax
disclosure requirements. Wisconsin discloses the amount businesses
pay in state income taxes. West Virginia and Arkansas both disclose
how corporations use some tax credits. Massachusetts discloses state
income taxes paid by corporations and the loopholes used to reduce
payments, but companies' identities are no longer disclosed.
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this article]
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In 1993, when Massachusetts did
disclose company names, the Boston Globe used information available
under the corporate disclosure law to show that some companies took
hundreds of thousands of dollars in state tax credits intended to
create jobs, while actually laying off workers.
The U.S. Congress is also contemplating
making federal corporate income tax information available to the
public in the wake of the Enron and WorldCom scandals that deceived
shareholders and employees. Enron told its shareholders it had
profits of $1.8 billion between 1996 and 2000 but told the IRS it
had lost a billion dollars during that very same period. In a
similar incident, WorldCom told its shareholders it had $16 billion
in earnings from 1996 to 2000 but told the IRS that they totaled
less than $1 billion in taxable income during that same time.
In addition to pushing for more
openness in Illinois' corporate tax system, the governor renewed his
call to close corporate loopholes that benefit a limited number of
big companies while increasing the tax burden on individual
taxpayers and small business.
"There's one more thing we can and
should do right now: close unfair corporate tax loopholes. If the
General Assembly passes the budget I've proposed, more than $400
million previously used for loopholes will instead be invested in
education, health care and public safety," the governor said.
"I know that many legislators are
receiving pressure from many big corporations not to close these
loopholes. They've hired armies of lobbyists to protect their turf.
But I hope everyone here realizes that time is passing, and this is
a time to choose. It's time to choose between children who need
health care and certain corporations who hide their tax breaks from
the people. It's time to choose between early childhood education
and corporations who hide their tax breaks from the people. It's
time to choose between hiring more police officers and corporations
who hide their tax breaks from the people. I'm choosing more money
for education, health care for working parents and better equipment
for our police. I hope the men and women of the General Assembly do
too."
[News release from the
governor's office]
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