Good for Business: How Illinois Can Best Support Small Business
April 7, 2016
oday, the Center for Tax and Budget Accountability (CTBA) released a new report, Good for Business: How Illinois Can Best Support Small Business, which highlights the best practices and policy initiatives decision makers could take to support small businesses in Illinois.
“The data is clear: If Illinois wants to support small businesses, income tax cuts aren’t the ticket. Instead, the state must build the fiscal capacity to invest adequately in core services, like education and infrastructure, if it really wants to promote small business growth specifically and its economic well-being generally,” said Ralph Martire, the organization’s executive director.
“The Report’s finding that there is no statistically meaningful correlation between a state’s tax policy and hiring or small business growth is spot on,” said Robert Starks, Professor Emeritus, Inner City Studies and Political Science, Jacob H. Carruthers Center for Inner City Studies, Northeastern Illinois University. Professor Starks was an independent peer reviewer of the report, along with Peter A. Creticos, Ph.D., President and Executive Director, Institute for Work and the Economy; Michael Mazerov, Senior Fellow, State Fiscal Project, Center on Budget and Policy Priorities; Robert Rich, Former Director, Institute of Government and Public Affairs, University of Illinois; and staff of the Illinois Department of Revenue.
Policy leaders across Illinois have identified supporting small businesses and entrepreneurship as key to reviving the state’s sluggish economy. And no wonder, given that over 99 percent of all businesses in Illinois are “small business” as defined by the Small Business Administration.
While various regulatory and other policies impact small businesses, the primary policy tools available to decision makers fall into two distinct categories. The first is reducing business and/or individual income taxes in the hope that the tax relief will incentivize hiring and business expansion. The second is making adequate investments in core public services and goods that businesses need to thrive, like education and infrastructure. Of the two primary policy choices available, the evidence overwhelmingly indicates that the latter is most effective for supporting small businesses.
Full article: www.ctbaonline.org