Monday, March 28, 2011

High taxes driving Caterpillar out of Illinois

Jimmy Johns already left Illinois now it appears Caterpillar is tired of being looted by the politicians.

A letter between Caterpillar C.E.O. Doug Oberhelman and Governor Pat Quinn is raising questions about the company's future in Illinois. In the letter, Oberhelman expresses concern over the state's recent corporate and personal income tax hikes. They are expected to cost the company's 23,000 Illinois employees about $40 million this year.

"I want to stay here. But as the leader of this business, I have to do what's right for Caterpillar when making decisions about where to invest," Oberhelman wrote. "The direction that this state is headed in is not favorable to business, and I'd like to work with you to change that."

A published report out of Springfield claims the letter also says four states have asked Caterpillar to leave Illinois. A spokesman won't confirm that, but says it's not unusual to get offers from Governors in other states where CAT does business.
What did the Democratic Governor of Illinois have to say about this. Well he is convinced Cat will stay in Illinois because it is great place to do business. Well at least according to him. In reality Cat may not leave because of the all the sunk costs they have but I can assure you they will think seriously about making further investments in a state that has no intention of cutting spending and views its citizens and businesses as milk cows to be used to pay for whatever non-sense the politicians can think up. We keep seeing example after example that prove that people and business respond positively to incentives and negatively to disincentives.
Yet the politicians who only care about being re-elected continue to ignore this reality.

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