Hyde Park Angels isn’t a political organization. We are neutral when it comes to political parties. Our mission is to find, fund, mentor, and create a climate for entrepreneurial start up companies in the midwest. We will continue to passionately pursue that goal.
Illinois Corporate and Personal Income Tax Increase
We disagree with the Illinois General Assembly, and Governor Quinn’s choice of significantly raising not only personal income taxes 67% to 5%, but are similarly disappointed in the decision to raise corporate rates to an all in rate of 9.2%. We also disagree with the recently passed internet sales tax of 6.5% that has caused Amazon and Overstock to pull out of partnerships with Illinois entrepreneurs. HPA is not alone, as other business organizations, and opinion leaders from the political right and left agree with us.
In a very tough economic environment with high jobless rate, many people are turning to entrepreneurship to sustain an income. HPA is here to support them. Illinois government officials have shown by their actions that they are not concerned with them. They have just made our job much more difficult, and increased the hurdle rates for Illinois companies. Competition doesn’t exist in a vacuum and end at the state line. It’s international, even for the companies we support.
Not only do we work closely with entrepreneurs, but we bridge the gap for them and work upstream with venture capitalists. After speaking with some VC’s, we have discovered that they are locating their businesses out of Illinois. Today, the newly elected governor of Wisconsin Scott Walker said that they would be cooking up incentive plans for businesses to move across the northern border up to Wisconsin. Indiana governor Mitch Daniels said that Indiana already had a financial edge over Illinois, and this extreme tax hike will only benefit Indiana even more. We will continue to keep an eye on this, and remind everyone, our mission is to invest and fund companies in the midwest-not just Chicago.
While most of our companies are pre-revenue, and don’t worry too much about taxes, they pay very close attention to the business climate in which they choose to grow. The expectation is that someday they will grow large enough to employ lots of people and pay a lot of corporate income taxes. Expectations for the future drive decision making today. We would strongly urge the Illinois General Assembly to rescind their tax increase, and read University of Chicago Nobel Prize recipient Robert Lucas macroeconomic work on how people make decisions based on expectations.