No, they’re not the home states of the schools in the NCAA Final Four. They’re the states that would like Caterpillar to relocate from Illinois. Why would Caterpillar look to leave the Land of Lincoln and fly away?
Taxes and the business environment.
As this story in the Wall Street Journal notes, Illinois increased is personal income tax rate from 3% to 5% and the corporate tax from 4.8% to 7%. Businesses look at their bottom lines, and when it becomes too expensive to do business in one state, there are others that are far more welcoming.
In a letter to Governor Pat Quinn, Doug Oberhelman, Caterpillar’s CEO stated,
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. The direction that this state is headed in is not favorable to business, and I’d like to work with you to change that.
Will the Democrats in the state, who voted on a party-line basis for higher taxes, look to make the business environment friendlier?
I’m not holding my breath.