Chicago Board of Trade and Chicago Mercantile Exchange may leave Illinois for greener pastures.
Focus is on Ill. Tax Hike after CME Threatens Move
by Deanna Bellandi, 10 June 2011
The suggestion by the owner of two major futures exchanges in Chicago that it could move jobs out of Illinois because of the state’s business tax casts another spotlight on the unpopular increase Democratic Gov. Pat Quinn said was necessary to help rescue the state’s finances.
CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade, said this week it is studying a possible relocation. The announcement comes just a couple months after manufacturing giant Caterpillar Inc. in central Illinois said it had been courted by other states. Caterpillar has since said it is staying put.
* * *
Dealing with a massive budget deficit, Illinois raised its corporate tax rate in January from 4.8 percent to 7 percent and the personal income tax rate from 3 percent to 5 percent. That enticed other states, including New Jersey, Indiana and Wisconsin, to try to poach Illinois businesses.
* * *
Last year, Illinois agreed to give $272.7 million in tax breaks and other incentives to 67 companies that were courted by other states to move their jobs elsewhere, according to state records. This year the promised incentives … are likely to surpass last year’s total.
* * *
“I don’t think anybody likes paying taxes, but that’s the price of having a democracy,” [Quinn] said.
Chicago Mayor Rahm Emanuel said he … was “confident” the exchanges would stay in Chicago. He did not elaborate.
* * *
Illinois Chamber of Commerce chief Doug Whitley said it’s not good enough for Illinois government to try to craft incentive packages for businesses after the state raised their taxes.
“Politicians need to pay attention to what employers are thinking. There are economic consequences to political decisions that they sometimes ignore,” Whitley said.
To remind everyone what the 'experts' said when they raised the taxes.
Illinois’ recent income tax increase won’t cause a mass exodus of businesses from the state, experts agree.
“Businesses like to say that they leave states because of tax issues, but businesses are not actually all that mobile, and I think it’s a lot less common for businesses to leave from tax issues as is commonly believed.”
Now Illinois is bribing every major employer there to stay. My word, did they forget how they got Boeing to relocate to Illinois?
In addition, many annalist are estimating the total bribes to industries to stay, are now equal to, or more then they estimated they would raise from the tax increase.