- Associated Press - Tuesday, July 29, 2014

July 28, 2014

The (Champaign) News-Gazette

Tax law trumps tutorial

Delivering lectures on taxes others should pay isn’t nearly as effective as revising the tax code.

Illinois’ Democratic U.S. Sen. Richard Durbin is running for re-election and that explains, at least in part, why he recently chastised Chicago-area company AbbVie for its plan to move its corporate headquarters overseas and Deerfield-based pharmaceutical chain Walgreen Co. for its consideration of following AbbVie’s example.

In a ringing populist tone, Durbin calls it a “decision to desert America.”

Instead of following’s Durbin’s do-as-I-say-not-what-the-law-permits approach, the better answer would be to change the incentives that encourage businesses to take the actions he vigorously condemns. In other words, encourage them to stay home.

Aside from the obvious politics at play, the contentious issue involves a practice known as “inversion,” defined as reincorporating a company overseas in order to reduce its tax burden on income earned abroad. It is a tactic embraced by companies that earn much of their income outside the United States. Because that income is taxed abroad as well as in the country of incorporation, businesses often choose reincorporation in a country that has a lower tax rate than the United States.

It has been legal for roughly 30 years, but inversion has become increasingly popular in recent years as companies have discovered the potential savings.

One need not have the wisdom of Adam Smith to understand a fundamental rule of economics: Individuals and organizations can be counted on to act in their best interests.

That’s why almost everyone, including Durbin, takes the maximum personal exemptions and deductions for mortgage interest when they file their annual state and federal income taxes.

Corporations are no different. They seek to minimize their expenses and maximize their revenue so as to make the largest profit the tax code allows.

Durbin seems to recognize that reality, calling the tax code a “legal jumble of credits, deductions, specialized breaks and arcane policy” and says he wants to fix it.

So fix it.

No one, of course, is happy to see American companies redirect their home bases abroad for tax reasons, and it is scandalous that the tax code encourages that behavior. But as big businesses become increasingly focused and dependent on foreign markets, they will continue to do so. In a worldwide market, the U.S. must be competitive with foreign countries or suffer the adverse consequences.

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July 25, 2014

The (Alton) Telegraph

A ‘second chance’ should not infringe employer rights

People deserve second chances.

If not for a mulligan here and there on the golf course of life, a lot of people would never make it to the clubhouse.

It’s tough being in a position of having a past transgression linger for years. Sometimes it’s a matter of youthful indiscretion that clouds adulthood. The newspaper pages are filled almost daily with stories about criminal acts that haunt people much longer than they should because of the agelessness of the Internet and a quick Google search.

We imagine it is beyond frustrating for a person to serve time only to have application after application rejected because of one standard checkbox: “Have you ever been convicted of a felony?”

Punishment is one thing. A judge or a jury says “guilty” and decides how a convict is going to make amends for a crime. Usually, that’s through prison time.

Then there’s accountability, which runs parallel to punishment but is slightly different. Accountability is the societal reckoning that results from an action and the obligation to show change as to avoid recurrence.

It’s that accountability that seems to be swiped away with the signing of a new law in Illinois that prohibits employers from doing background criminal checks on potential employees until after the interview process.

That means private businesses can no longer have questions about convictions or criminal problems on their applications, even though most have explained that such convictions do not necessarily disqualify someone from employment. Some exceptions apply, such as jobs in the medical, security and construction fields.

“Everyone deserves a second chance when it comes to getting a job,” Gov. Pat Quinn said when he signed The Job Opportunities for Qualified Applicants Act into law this week.

The state has already added to the burden of employers trying to protect themselves and their livelihoods by automatically erasing some less-serious juvenile crimes and adding to the types of felonies that can be legally sealed from view.

The purpose of a job application is to serve as a preliminary screening tool. There are times when a past conviction raises a whole additional set of issues that warrant open discussion with an applicant. For example, someone whose past includes serving time for money laundering might have little chance of getting a position with a bank. Disclosing that on an application allows a business owner to know there must be some resolution and use the interview process for that purpose if the person’s strengths and skill sets would otherwise be useful.

Waiting until the interview takes place to find out such significant details of a person’s history will create more burden and cost on the business owner and, frankly, probably cause those who do the hiring to just move on to the next person. That in itself could do more harm than intended.

Eliminating a checkbox will do nothing to change mindsets. But it will take away the rights of businesses to establish their own hiring guidelines based on what they know is best for their company.

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July 24, 2014

Chicago Sun-Times

Chicago’s good guys can help turn the tide

It’s a start.

An important start.

Chicago Police on Thursday arrested a teen gang member in the soul-crushing shooting death of an 11-year-old girl killed at a slumber party last Friday, just before the party-goers dug into their s’mores.

Police Supt. Garry McCarthy attributed the quick arrest to help from neighborhood residents. Police had “nine good witnesses,” McCarthy said, and he praised the community for coming forward to help solve Shamiya Adams’ murder. An errant bullet, shot on the street, went through a window and struck Shamiya in the head.

This newspaper, as well as many others, has long urged this kind of community response. Far too often people who know something turn away, either out of fear or some community code against “snitching.”

But look what happens when neighbors step forward: a law-abiding community is empowered, an alleged murderer is apprehended.

The beginning of the end of the violence - the unrelenting and devastating violence that is grinding certain neighborhoods, and the soul of the entire city, to an unrecognizable pulp - has to start with the law-abiding among us stepping forward. It’s just one part, of course. It also takes fewer guns, better schools, more jobs. But it’s an important first step.

We know people care.

East Garfield Park residents poured onto the streets to grieve for Shamiya, an 11-year-old cut down as she hung out with her girlfriends at a slumber party. In just two days, a website set up to collect money for Shamiya’s funeral collected nearly $6,000, some of it in $10 and $25 increments.

There is a deep and widespread desire to end a rash of foolishness on the streets, a profound recklessness that is ending in death. In April, 14-year-old Endia Martin was killed when a gun was introduced to a fight between two girls, police say. With Shamiya, police say, suspect Tevin Lee fired in retaliation for a fist fight between two 14-year-olds earlier in the day.

Nine witnesses spoke up for Shamiya, telling the police and their neighbors across Chicago that they refuse to let the bad guys win.

Bit by bit, neighbor by neighbor, Chicago’s good guys can help turn the tide.

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July 22, 2014

The (Joliet) Herald-News

900 funds? State should consolidate

The Illinois Department of Natural Resources paid $511,000 last year to buy 71.8 acres for the land in McHenry County, which, according to a recent news release, is the first wildlife refuge established in northern Illinois.

The purchase was part of 547 acres of public land acquired in four Illinois counties to boost public access for hunting, fishing, wildlife viewing and outdoor recreation. The total cost was $2.8 million.

On one hand, the expansion of natural areas seems to be a positive development.

On the other, the state remains in dire financial straits. When Illinois still owes billions of dollars to its vendors ($4.5 billion at last count), how can it justify buying more property?

The simple answer is that the state has multiple funds. Some are capital funds, such as the IDNR’s Open Lands Trust, from which money is appropriated to buy land for conservation and recreation.

Others are operating funds, such as the struggling General Fund, from which the state’s vendors are paid.

So, how many funds does the state of Illinois use to manage its finances?

Might it be in the neighborhood of 60, the number of funds that Wisconsin, our neighbor to the north, has?

Perhaps it is closer to 76, the number of funds overseen by the state government of Michigan, a state nearer our size.

No.

Believe it or not, Illinois has an “estimated 900 funds,” according to the authors of “Fixing Illinois: Politics and Policy in the Prairie State.”

James D. Nowlan and J. Thomas Johnson believe that number is more than the state needs.

It takes extra work by state employees to keep track of 900 funds, the authors wrote. The possibility of errors is multiplied. And the state’s practice of transferring money from fund to fund (remember Gov. Rod Blagojevich’s infamous “fund sweeps” to finance his pet projects?) creates difficulties in accounting and management.

Nowlan and Johnson believe their consolidation would enhance transparency and eliminate manipulation. They further suggest that fund transfers be greatly reduced, and that the General Fund become the repository for most incoming revenue, to provide better control when it is spent.

Such actions could lead to more intelligent, efficient management of state money - whether for buying land or paying bills.

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