The First Cabela's to Close

Cabela's is self-described as the "World's foremost outfitter", and one look at any of their stores would add an exclamation point to that claim. This author was even told how "lucky" he was to live near a Cabela's. Two stories of anything you might need to outfit a cabin or an expedition. The middle of the store is occupied by an atrium, under which sits a faux-mountain landscape, complete with taxidermy from all over the world, and an aquarium cave stocked with examples of the local trophy fish. The store itself could be mistaken for a mall, with a bargain cave, gun library, sweets shop, conference rooms, arcade and restaurant. The aisles are wide enough to fit three carts; plenty of room for the busy shoppers. The prices are pretty darn good too, almost on-line discounter good. But the store in Cook County Illinois is different; proof that while government may not be able to create jobs or improve an economy, it is more than capable of killing businesses and jobs.

The first and most striking difference about the Cabela's in Hoffman Estates is how packed it is; not with shoppers, but with merchandise. The aisles can barely fit a shopping cart, and the spacious atrium is encroached by racks of clothes and stacks of boxes. All of the merchandise has been crammed onto the first floor, because the upstairs is sealed off. The restaurant is permanently shut down, and most shoppers are probably unaware that the arcade even exists. The reason is simple: ridiculous taxes. This Cabela's opened in September of 2007, after having been enticed into Cook County by promises of tax breaks, but no sooner did it open than Todd Stroger (D), the president of the Cook County Board, proposed massive tax increases. The promises made to Cabela's (and other retailers) were quickly abandoned. To add insult to injury, Commissioner Suffredin proposed an anti-gun retailer ordinance that would have effectively shut down a core part of Cabela's business. The ordinance was mostly a political stunt; one that the Democrats of Illinois like to pull every primary season, but it sent a clear message to Cabela's: "fooled you".

So why close off the entire upper floor? Retailers in Cook County are assessed property tax, in part, based on the amount of retail sales space they have. By closing down 50% of its retail sales space, Cabela's may have shaved 5% to 10% off its property tax bill. A few percent is nothing to sneeze at. Illinois municipal governments receive most of their operating budgets from property taxes, and they treat businesses the same way an olive press treats olives. It would be no surprise at all if the Cabela's property tax amounted to around 2% of its gross receipts. Closing down the upper floor might seem excessive, but saving 0.2% of gross receipts could be a significant boost to net profits, especially for a competitive discounter.

After getting rid of Stroger, along came Preckwinkle (D), who just proposed a $25 per gun and 5¢ per bullet sales tax. When bullets only cost 3.5¢ to 20¢ apiece, a 5¢ tax is ridiculous, and $25 per gun is around 5% to 10% of the value of most guns. Preckwinkle dropped the bullet tax, but the gun tax was just approved by the Finance Committee for a vote by the whole, along with a bunch of other tax increases. Primary season is long over with. The proposal is not an anti-gun tax, but retail vampirism disguised as sin taxes. The normal sales taxes in Cook County are already high, and the sales tax in the Village of Hoffman Estates is 9.5%. There is no reason for a person to pay a total tax of between 14.5% and 19.5% on a gun purchase in Cook County, when they can go 3 miles down the road to one of Illinois' largest gun dealers, GAT Guns, in East Dundee, Kane County, where the sales tax is only 8.25%.

Moving out of Cook County is an attractive option. The Palatine Menards (a DIY home improvement chain) already became the Long Grove Menards, and both Home Depot and Walmart each opened a location in Lake Zurich (7.5% tax), Lake County, just 5 miles away from their Palatine stores. Stores do not move just because the sales taxes are lower, but because the other taxes and fees are also lower.

It might seem strange to abandon a brand new, multi-million dollar building and property, but sometimes you just have to accept when you are not wanted and cut your losses. Prior to being enticed into Cook County, Cabela's was investigating nearby locations in Kane County. There is also a nice chunk of land available next to the Menards in Long Grove. A move need not be a total loss either. For example, Cabela's could donate the store to a non-profit, such as the Max McGraw Wildlife Foundation, and the store could be turned into an indoor taxidermy and conservation museum and used for conservation and environmental education. Perhaps call it the Cabela's Conservancy Museum and Exploratorium. Cabela's then gets to take the donation against its profits, and recoups 44.5% of the property value (35% Federal corporation tax and 9.5% Illinois corporation tax). As a bonus, Cook County loses out on the retail sales taxes, and on the property tax as well, since non-profit educational foundations are exempt.

After reading this, and probably gaping mouth-open at the high tax rates, perhaps you now understand why business owners have been telling Mitt Romney and other Republicans that they feel as though they are attacked by their own government. Do not fool yourself that the taxes are going to a good cause either. The $600,000 Preckwinkle expects to receive from her gun tax will barely cover two of the no-show jobs at Stroger Hospital, or perhaps eight of the no-show positions on sub-boards that the County Board creates for their friends and family, or maybe three of the pensions for people long retired from County jobs. Visit Open the Books to see how unfair and wasteful government spending is in Illinois (and other states).

The Nazis and Soviets erected razor wire fences and machine-gun towers to stop their victims from fleeing. The Cook County Board has no such option; however, fleeing the county only works for stores that draw people from far and wide (like Cabela's) and people who live near the edges of the county. When statists make their policies statewide or nationwide, the only options are to either flee the state or nation, or vote the statists out. The TEA parties exist for a reason; the people of the United States, rich and poor, are overtaxed, and the tax revenues are wasted in kleptocratic or irresponsible ways. The TEA parties want reasonable, honest, responsible government, but how did Democrats respond? Democratic campaign ads have universally tied Republicans to "extreme" TEA party groups, and have promised to "defeat the TEA parties" and "kick them out of Washington [DC]". If you are against kleptocracy, the Democrats have proclaimed that they are against you.

For now, Cabela's has no (disclosed) plans to close its Hoffman Estates store, but it was already annoyed with the Cook County Board, and recent Board decisions have not helped the matter. The issue is not 4 years or 8 years or 12 years of bad policies, but 80 years of ever-increasing government compounding bad policies.