The Illinois General Assembly may consider legislation next year that would require publicly traded corporations operating in the state to disclose their corporate taxes.
It’s a bad tax policy, and with the state’s current employment situation, it’s amazing such legislation is even being considered.
The bill, HB 3627, has been introduced by Majority Leader Rep. Barbara Flynn Currie,D-Chicago, and was the subject of a hearing by a House committee last week. The idea has been considered in Illinois before. No other state requires such wide-ranging disclosure. Corporate federal returns also are considered confidential.
Publicly traded corporations are required to release financial reports, and the accuracy of those reports is scrutinized by the federal government. That scrutiny has increased since the Sarbanes-Oxley Act of 2002.
But there is no practical reason for the public to have access to corporate tax returns.
The state Department of Revenue can provide information to the General Assembly and the public about corporate returns in aggregate. That’s plenty of information to set tax policy.
The desire of the legislation seems to be to embarrass some corporations that may or may not pay what seems like a fair amount of state taxes. But taxes are complicated, and the state already has ample resources to audit corporate tax returns and enforce any violations of the law. If corporations aren’t operating within the law, they should be punished. It’s our guess that most corporations are following the law and using legal means to reduce the taxes they pay to the state.
Individual tax returns also are confidential, although those seeking office are often asked to make their returns public. Politicians respond to that request to varying degrees.
The real danger in this legislation is the message it sends to businesses in the state. Illinois has the second-highest unemployment rate in the nation and has not seen the jobs recover to the same degree as the rest of the country. The consideration of the legislation is a signal to businesses that the state is more interested in what it can glean from them than in helping them create jobs.
If the state’s corporate income tax policies need to be reviewed, the General Assembly has ample information to consider. Hopefully, this legislation won’t receive serious consideration in the General Assembly and another anti-business signal won’t be sent by the state.
The (Decatur) Herald & Review