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ObamaNation See other ObamaNation Articles Title: Chicago's Trillion-Dollar Financial Engine At Risk Of Leaving Over $800 Million Tax Proposal As the winds whip through the canyons of Chicago's skyscrapers, a storm is brewing between the city's derivatives powerhouses like DRW, IMC, CME, and Cboe, and a new mayoral administration desperate to fill its half-a-billion-dollar budget chasm, Bloomberg reports. The city's financial giants, traditionally known as the fulcrum of the global derivatives market, have been greasing the gears of global trade for decades in what's now a $75 billion industry. Now, they find themselves in the crosshairs of an $800 million tax proposal from Mayor Brandon Johnson. The plan? levy every financial transaction. The response? Chicago's financial elite are rattled - particularly as crime rates surge. Now, a quiet mobilization is underway. These giants of trade, who typically spend their days outfoxing each other in the markets, are now colluding to push back against what they see as punitive policies. This new front sees them sharing data to amplify their value proposition, making it crystal clear to policymakers the vast economic benefits they bring to Chicago. "We don’t want to leave... But we cannot be disadvantaged in the world's most competitive markets," said Ed Tilly, the CEO of Cboe Global Markets. Chicago's political elite, meanwhile, are totally screwed. With projections showing a budget deficit of $538 million for next year and increasing costs driven by a cocktail of inflation and rising numbers of destitute asylum seekers, the city's officials are scouring for revenue sources. And what better place to look than the gilded halls of the derivatives industry? Which can just... move. The finance industry has also been a boon for commercial real estste. While corporate downsizing since the pandemic has left parts of downtown hollowed out, 60% of the trading companies that have signed leases since 2020 have expanded their footprint in the city, according to Jones Lang LaSalle Inc. The Chicago firms that are sharing information in an informal group include Cboe, market makers Optiver Holding and IMC Trading, as well as DRW Holdings, best known for high-frequency trading. They want Johnson to know that the economic benefits could be at risk if rampant crime makes it too hard to recruit talent or a transaction levy puts the industry at a disadvantage to peers including Intercontinental Exchange Inc. in Atlanta and Nasdaq in New York. -Bloomberg That said, Mayor Johnson has been hesitant to commit to the transaction tax, signaling an openness to discussions. Such a levy would have to get the nod from Illinois Governor JB Pritzker, who seems wary of the mass exodus it could precipitate. Chicago’s recent history is a testament to this, as finance titan Ken Griffin relocated his Citadel business to Miami last year, pointing at the city’s crime and fiscal woes. Johnson also has to try and live up to his campaign promises, such as not raising property taxes. These have left him with few tools in his fiscal toolbox. While talk of taxing the financial behemoths has gained traction among the public, the potential 800% spike in trading costs associated with the transaction tax has spooked the derivatives industry. According to Ralph M. Martire of the Center for Tax and Budget Accountability, "Chicago can't continue with its current revenue stream." Poster Comment: I would not want the derivatives industry to move to Nashville. Derivatives will blow up next year. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 1.
#1. To: Horse (#0)
(Edited)
You would think that Chicago had learned its lesson when they implemented a "head tax" on businesses with more then 50 employees. Many moved out to the suburbs since they figured they would not be subject to such insanity there. That left a large number of vacant manufacturing facilities. Many people became reverse commuters and some even moved out to the suburbs, except in places like Maywood which was predominantly black. ;)
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