Dec 7, 2015
There were 31 Illinois-based companies listed in the Fortune 500 in 2015. These included Archer Daniels Midland, Boeing, Walgreens, State Farm insurance, Sears Holdings, Kraft Foods, Caterpillar, Allstate insurance, giant pharmaceutical and healthcare equipment companies Abbott Labs and Baxter, tractor company John Deere, McDonald’s, Motorola Solutions, the giant electric company Exelon, United Continental Airlines, Illinois Tool Works, Sara Lee, and Navistar.
So how can Illinois be broke?
The answer, of course, is that these companies avoided paying taxes, by hook and by crook. And the Illinois state government, the Chicago city government, and the federal government help them do it.
Take the example of Boeing. In 2013, they were supposed to pay 1.65 billion dollars in taxes on 6.23 billion of profit – that they admitted to. But they “deferred” this tax into the future – and paid almost nothing. Caterpillar routed its profits through a Swiss company to avoid taxes. McDonald’s, Baxter, and Northern Trust used similar tricks to keep their money overseas. Exelon, the giant power company, avoided taxes by claiming “bonus depreciation” – meaning they said their power plants would lose value over time, so they shouldn’t pay anything. United Continental used “operating loss carry-forwards” to avoid taxes. They lost money in the past, so said that even though they made money now, they don’t have to pay.
All of these crooked maneuvers and many more are legal, because the tax law was written to benefit the big corporations.
There is an easy answer to the budget crises in Illinois – make these super-rich companies pay taxes!