Published on Saturday, October 29, 2011 by CommonDreams.org
Watch Out America, Some Greedy Companies May Be Headed Your Way
A number of Illinois corporations are threatening to leave the state unless their taxes are cut and state government is reduced in size. Governor Quinn and Chicago's Mayor Rahm Emanuel are desperately trying to negotiate peace with Republican leaders, who have proposed a 50% state tax cut for the particularly contentious Chicago Mercantile Exchange and Chicago Board Options Exchange. For the rest of us, the state tax rate is up 66%, our biggest city has the highest sales tax in the country, and utility and transportation fees are being increased.
But Illinois corporate taxes are NOT too high, at least for top-earning companies. The rates may be high, but the amounts paid are not. A review of corporate 10-Ks provides the facts. If just 20 large Illinois firms had paid state taxes at the required statutory rate (7.3%) over the past three years, an additional $7.5 billion would have been returned, or about half of the state's current deficit.
For 20 of the largest Illinois corporations, with a total of $157 billion in net income, only $3.5 billion was paid in total state taxes.
That's a 2.2% tax rate.
Caterpillar CEO Doug Oberhelman recently said, "Legislators in Illinois have created an environment that is unfriendly to business and investment." Caterpillar paid less than 1%.
The following is a list of the twenty companies with their effective 3-year state tax rates:
Sara Lee 0.0%
Boeing 0.3%
Caterpillar 0.8%
Baxter Int'l 0.9%
Archer Daniels 1.2%
Tenneco 1.4%
Navistar 1.5%
Deere & Co. 1.6%
Kraft Foods 1.8%
Cisco Systems 1.8%
Fortune Brands 2.1%
McDonald's 2.3%
Abbott Labs 3.0%
Illinois Tool Works 3.0%
Walgreen Co. 3.2%
Exelon Corp. 3.9%
United Stationer 4.0%
W W Grainger 5.3%
Discover 5.5%
Sears Holdings 5.8%
What about the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE)? While paying a fair share of federal and state taxes, their combined profit margin (income as a percent of revenue) over the past three years is higher than any of the top 100 companies in the nation! CME took a stunning 54% of its $8 billion revenue as clear profit. But they're demanding a tax break.
For over 100 years CME has used the city's location, reputation, technology, and infrastructure to build up the nation's most lucrative business. Now they're threatening to leave.
Meanwhile, Illinois business executives remain quiet about the proposal for a fair-minded and sensible financial transaction tax (FTT). Fair-minded because the rest of us pay a 6-10% sales tax on a pair of shoes while millionaire investors pay ZERO percent on a financial transaction.
How much money could be generated by an FTT in Illinois? CBOE handles over a billion contracts a year with a dollar volume of close to a trillion dollars. A one-quarter of 1 percent tax on contracts would return $1.5 billion dollars, enough to pay off Chicago's budget deficit.
The CME Group, which includes the Chicago Board of Trade, handles about 3 billion annual contracts worth well over 1 quadrillion dollars. One-thousandth of 1 percent of that (about a dollar for every $100,000) would pay off the total budget deficit of Illinois.
In Illinois, elected political leaders don't stand up to the businesspeople who make record profits and then threaten to leave the state. If you live in one of the other 49 states, watch out: it may be your problem next.
But Illinois corporate taxes are NOT too high, at least for top-earning companies. The rates may be high, but the amounts paid are not. A review of corporate 10-Ks provides the facts. If just 20 large Illinois firms had paid state taxes at the required statutory rate (7.3%) over the past three years, an additional $7.5 billion would have been returned, or about half of the state's current deficit.
For 20 of the largest Illinois corporations, with a total of $157 billion in net income, only $3.5 billion was paid in total state taxes.
That's a 2.2% tax rate.
Caterpillar CEO Doug Oberhelman recently said, "Legislators in Illinois have created an environment that is unfriendly to business and investment." Caterpillar paid less than 1%.
The following is a list of the twenty companies with their effective 3-year state tax rates:
Sara Lee 0.0%
Boeing 0.3%
Caterpillar 0.8%
Baxter Int'l 0.9%
Archer Daniels 1.2%
Tenneco 1.4%
Navistar 1.5%
Deere & Co. 1.6%
Kraft Foods 1.8%
Cisco Systems 1.8%
Fortune Brands 2.1%
McDonald's 2.3%
Abbott Labs 3.0%
Illinois Tool Works 3.0%
Walgreen Co. 3.2%
Exelon Corp. 3.9%
United Stationer 4.0%
W W Grainger 5.3%
Discover 5.5%
Sears Holdings 5.8%
What about the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE)? While paying a fair share of federal and state taxes, their combined profit margin (income as a percent of revenue) over the past three years is higher than any of the top 100 companies in the nation! CME took a stunning 54% of its $8 billion revenue as clear profit. But they're demanding a tax break.
For over 100 years CME has used the city's location, reputation, technology, and infrastructure to build up the nation's most lucrative business. Now they're threatening to leave.
Meanwhile, Illinois business executives remain quiet about the proposal for a fair-minded and sensible financial transaction tax (FTT). Fair-minded because the rest of us pay a 6-10% sales tax on a pair of shoes while millionaire investors pay ZERO percent on a financial transaction.
How much money could be generated by an FTT in Illinois? CBOE handles over a billion contracts a year with a dollar volume of close to a trillion dollars. A one-quarter of 1 percent tax on contracts would return $1.5 billion dollars, enough to pay off Chicago's budget deficit.
The CME Group, which includes the Chicago Board of Trade, handles about 3 billion annual contracts worth well over 1 quadrillion dollars. One-thousandth of 1 percent of that (about a dollar for every $100,000) would pay off the total budget deficit of Illinois.
In Illinois, elected political leaders don't stand up to the businesspeople who make record profits and then threaten to leave the state. If you live in one of the other 49 states, watch out: it may be your problem next.
23 Comments so far
Show AllIts only us working folks that tolerate tax rates of 25% (or more). If not for us, who would fund all of the corporate welfare programs for these outfits?
Corporate Welfare Queens Must go! >^^<
Hoa binh
I called around the heating oil prices on Thursday, found best rate and ordered on Friday and it has increased $.10 per gallon. What did the casino gamblers do yesterday? What a rip off costing me another $25. And to top it off I've been waiting over 10 years to invest in another energy efficient heating source but none have come to the market. Nothing on grid? Fuel cells I read about over 10 years ago and they said it would be 10 years before reach potential and be a sized to fit in your closet??? Where is it? Bloom Energy has what seems to be great source of green energy but not available to residential. Why? I suppose coal, oil, gas have killed these new energy sources just like they killed hemp industry, trolleys in first part of 20th century and then electric car in 1990's. We taxpayers have helped them get so wealthy and make billions in profit that they use those monies against anything that might put them out of business. Too bad they didn't use that money to innovate and find greener sources of energy. That is called exceptionalism???
They will not learn until we either force them or they destroy the country and the world for One Extra buck of profit.
This is a life and death struggle against the forces of fascism - coming to a town near you - if not Already there.
Of course, I don't know who their customers will be: all will be priced-out at some point...
Many seem to think that to end corporatism all one need to is remove the "Corporation as Citizen" ruling or put an end to the private financing of Political campaigns.
While this might help it will NOT end the undue influence of the Corporation over the political decision making process.
This was always at the heart of all those Free Trade deals that were pushed. They had very little to do with increasing jobs and while the enhanced profits were of great benefit , that was not the only reason free trade deals were pushed.
Corporations wanted them so that they could blackmail Governments with the threat of moving production elsewhere unless their demands were met.
Instead of genuflecting to the corporate power, WE THE PEOPLE, need to take charge of our local governments and elect those who represent US the PEOPLE, and not THEM the corporations which have been fleecing the system for the last 50 years, ever since Eisenhower warned about industrial/military/congressional complex. Let us turn inward into our communities and promote each other small business to produce stuff that we NEED for life not dumb shop till you drop in corporate shops with stuff made in China. This consumerist mentality and subsequent giving up OUR power to large corporations, which are run like mini-communist societies in their hierarchical dictatorship styles.
Getting our energy from sun, wind and water falling free from the skies on our roofs and back yards will initiate this process, because they fossil fuel companies will go out of business and so will other large corporation that count on cheap coal and oil. Let's use free markets to run those dinosaurs out of business and re-establish the government of the people, by the people and FOR the people, not for super rich entities, be it individuals or nameless and faceless corporation. We can best do it on a local level and vote for Council members, Mayors and County officials who respect the small business and regular citizens rather than caving in to sport team owners, their banksters and their lawyers. Let those parasites work for a living ;-)!
The entire world of finances is smoke and mirrors that are maintained by antiquated economic measures of "growth" which in unsustainable, particularly in this world of 7 BILLIONS of humans. Stop growing and start developing in non-material ways, which are not measured by GNP and other economic indicators which are false measure of reality and which are maintained by the rich games of such smoke and mirrors system of deception.
The important point to take out of this is we have a lot more evidence than one might have imagined of the great superiority of the PEOPLE'S AGENDA over the elite agenda. The depth and breadth of elite corruption in Merka is absolutely mind-boggling. Chicago is largely responsible for the NAFTAized destruction of the Mexican farming economy. It is the policies set in Chicago that effectively enslaved Merkan farmers to glut-production of two narrow food plant varieties, korn & soybeens, not to "feed the world", but to fuel the growth of unsustainable destruction enterprises of petro-synthetic fertilizers and patented pyro-seeds, and diesel-fried super-machinery. The Merkan farmer-slaves are subsidized with record grain prices, and the output is played on the global poker table to destroy local production worldwide like local production was destroyed in Merka over the past fifty years. Unfortunately, Mexico's criminal elites fell for the bait. Other governments aren't so stupid/corrupted as Mexico's. This is why the throngs of Mexicans cross the border. Merkans have no idea it was Chicago that pushed them. There is no greater corruption on this planet than going down in Merka.
Emanuel's role in the subprime lending crisis:
Emanuel was appointed to the board of scandal-plagued quasi-governmental mortgage giant Freddie Mac by President Clinton. [6][7] While Emanuel was on the board, Freddie Mac misreported its net income in 2000 by 30.5 percent, in 2001 by 23.9 percent and 2002 by 42.9 percent according to the SEC. Freddie Mac's failure is regarded as one of the precipitating events of the Financial Crisis of 2008.
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Ihttp://conservapedia.com/Rahm_Emanuel#Emanuel.27s_role_in_the_subprime_lending_crisis
Instead of genuflecting to the corporate power, WE THE PEOPLE, need to take charge of our local governments and elect those who represent US the PEOPLE, and not THEM the corporations which have been fleecing the system for the last 50 years, ever since Eisenhower warned about industrial/military/congressional complex. Let us turn inward into our communities and promote each other small business to produce stuff that we NEED for life, and not dumb shop till you drop in corporate shops with stuff made in China. This consumerist mentality and subsequent giving up OUR power to large corporations, which are run like mini-communist societies in their hierarchical dictatorship styles must stop!
Getting our energy from sun, wind and water falling free from the skies on our roofs and back yards will initiate this process, because they fossil fuel companies will go out of business and so will other large corporation that count on cheap coal and oil. Let's use free markets to run those dinosaurs out of business and re-establish the government of the people, by the people and FOR the people, not for super rich entities, be it individuals or nameless and faceless corporation. We can best do it on a local level and vote for Council members, Mayors and County officials who respect the small business and regular citizens rather than caving in to sport team owners, their banksters and their lawyers. Let those parasites work for a living ;-)!
The entire world of finances is smoke and mirrors that are maintained by antiquated economic measures of "growth" which in unsustainable, particularly in this world of 7 BILLIONS of humans. Stop growing and start developing in non-material ways, which are not measured by GNP and other economic indicators which are false measure of reality and which are maintained by the rich games of such smoke and mirrors system of deception.