Company took the tax credit and ran

Stanley R. Goldfarb, Las Vegas

Monday, Feb. 20, 2012 | 2:01 a.m.

Let’s talk about the connection between taxes and job creation.

Sears held Illinois hostage by threatening to move its headquarters elsewhere. Illinois capitulated and paid a $150 million ransom to save the jobs. (A tax “credit” is subtracted from the computed tax. This is far better than a deduction, which merely reduces the income on which the tax is computed.)

So what did Sears do? Two months after pocketing the ransom, it fired 100 workers!

You may wonder how much more was shifted to the bottom line by canning those 100 no-longer-needed human “resources.” Let’s assume the average wage plus benefits was $50,000 (after all, this is Sears, not Wal-Mart). Multiplying 50,000 by 100 comes to $5 million. That $150 million ransom could have paid those laid-off workers’ salaries for the next 30 years. Or, as our Republican friends would have us believe, enticed Sears into hiring 1,000 workers. That $150 million would have paid their $50,000 salaries for three years.

To sum up, Sears fired 100 people two months after its state taxes were cut by $150 million. Sears complained that it anticipates reporting fourth-quarter earnings of less than half of the $933 million it made the previous year.