Indiana to Illinois businesses: We want you
The Northwest Indiana Forum on Monday launched a $250,000 advertising blitz that will attempt to squeeze some business opportunities out of Illinois’ recent hike in personal and corporate income taxes.
Illinois employers soon will see billboards, print and cable ads asking them if they are “Feeling Squeezed by Taxes?” The campaign will be in concert with the Indiana Economic Development Corp.’s Illinnoyed by Higher Taxes? campaign launched in late January.
“In Indiana you will find a team that is trustworthy, that is reliable and that will help your business make more money,” said Forum Chairman Don Babcock in a campaign kickoff at the Hammond Marina.
Forum officials were joined by Indiana Secretary of Commerce and IEDC CEO Mitch Roob, who pointed to the wide differences between how Indiana and Illinois are addressing their financial challenges.
“In Indiana, Republicans and Democrats alike don’t believe you tax your way out of a deficit,” Roob said. “We do not believe you can tax your way into prosperity.”
In January, Illinois Gov. Pat Quinn signed legislation hiking Illinois’ personal income tax rate to 5 percent from 3 percent and its corporate income tax rate to 7 percent from 4.8 percent. That amounted to a 66 percent hike in the personal income tax and a 46 percent hike in the corporate rate.
So far, Indiana is biting the bullet on tax increases, with only a proposed hike in the state’s unemployment insurance tax now working its way through the General Assembly.
The combined $250,000 price tag of the two advertising campaigns is being paid mainly by the Forum and the IEDC, which is the state’s commerce agency. Other partners are the Porter County Economic Development Alliance, LaPorte County Economic Development Alliance, Starke County Economic Development Foundation, Newton County Economic Development Corp., town of Munster, town of Schererville, city of Whiting and NIPSCO.
With some of the Chicago skyline just visible out of the Hammond Marina’s second floor conference room, Roob said Northwest Indiana will be the focus of much of the state’s campaign to lure Illinois businesses across the border.
Forum and IEDC officials came to Monday’s event armed with a small arsenal of tax comparisons showing the overall tax burden for Indiana businesses is some 44 percent lower than that in Illinois. That comparison included corporate income tax, unemployment tax, workers’ compensation tax and Illinois personal property replacement tax.
The straight corporate income tax rate in Indiana is actually higher, but Illinois’ personal property replacement tax makes its total tax burden larger. In addition, Indiana enjoys a large advantage when it comes to workers’ compensation and unemployment tax rates.
The Illinnoyed campaign already has generated 2,700 unique visits to the IEDC’s solutionindiana.com website, Roob said. The campaign has a goal of enticing a dozen Illinois companies to relocate to Indiana this year.
There was surprisingly little chest thumping at Monday’s event, which was attended by economic development officials, representatives of Indiana businesses and some local officials. Instead, both Forum and IEDC officials gave the impression they mean to engage in a realistic and long-term effort to capitalize on the Illinois tax increases.
“You might ask, ‘Why now?’” said Forum CEO Mark Maassel. “This is simply the time to seize the opportunity.”
They also acknowledged they are in competition with other states to lure Illinois businesses. Just a week ago, New Jersey Gov. Chris Christie came to the Windy City to talk up his state’s perceived advantages to Illinois businesses.
“We have to make sure when people get ‘Illinnoyed’ by taxes (and) look across the state line, they look at the right state,” Roob said.
A tale of two states
Indiana vs. Illinois tax rates for individuals and businesses
Individual income tax: 3.4 percent
Corporate income tax: 8.5 percent
Personal property replacement tax: none
County income tax: up to 2.75 percent with Lake County being the only one in state with none.
Average workers compensation tax per employee: $471
Average unemployment insurance tax per employee: $189
Individual income tax: 5 percent
Corporate income tax: 7 percent
Personal property replacement tax: 2.5 percent*
County income tax: none
Average workers compensation tax per employee: $1,349
Average unemployment insurance tax per employee: $418
*Mainly a tax on businesses that adds to their effective tax rate.
Sources: Associated Press, Tax Foundation, Indiana Department of Revenue, Indiana Economic Development Corp.