Financial transaction tax for Chicago? Forget it

A Chicago tax on financial transactions, a proposal that’s been repeatedly floated from some progressives, is off the table in Springfield.

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A southbound view of South LaSalle Street in the Loop financial district on Dec. 28, 2022.

A southbound view of South LaSalle Street in the Loop financial district on Dec. 28, 2022.

Tyler Pasciak LaRiviere/Sun-Times

From Illinois law: “No unit of local government shall levy any tax on stock, commodity or options transactions.”

That statute has long been targeted for elimination by the Chicago Teachers Union and its allies. The CTU reliably shuns any proposal to increase property taxes across the board, instead pushing often-times “magical” solutions as alternatives. It’s one way the union has maintained its popularity among Chicago voters.

And new Mayor Brandon Johnson, who spent much of his career working for the CTU, made it clear during his inaugural address that he will eschew property tax increases, lumping them in with onerous fines and fees.

“We have a structural deficit,” Johnson told his audience. “And we have to invest in people. And we have to do that without breaking the backs of working people with fines, fees and property taxes.”

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During the campaign, Johnson proposed a 1%-2% “Big Banks Securities and Speculation Tax” that would raise $100 million. So, naturally, there’s worry he will try to use his considerable contacts in the General Assembly and CTU’s clout to persuade Gov. J.B. Pritzker to reverse his position on allowing Chicago to impose a transaction tax and ease the city’s structural deficit.

When he was asked last month about the transaction tax, Pritzker said, “Obviously, what we all want is a thriving financial services economy in the state and the city. I have not stood for a transaction tax, because I think it would be easy for those companies’ servers to move out of the state.”

The financial services industry employs thousands of Illinoisans. And one of the leaders of that industry left Chicago in a huff last year. Citadel CEO Ken Griffin abruptly announced his move to Florida after shutting down funding for his preferred Republican gubernatorial candidate, Richard Irvin. Griffin and Pritzker have exchanged verbal jabs ever since then, and Pritzker has repeatedly full-on attacked Griffin’s Florida Gov. Ron DeSantis.

It’s not a stretch to believe Griffin would love to see more Illinois-based companies relocate to Miami. Crain’s Chicago Business, citing “multiple industry sources,” recently reported that investment firm Guggenheim Partners, which has strong Chicago ties, “is on the verge of deciding to move its headquarters to Miami, the Florida city to which Citadel recently decamped.”

‘If we have to leave, we could leave’

And lots of heads turned last week when Bloomberg reported that CME Group CEO Terry Duffy indicated the company could leave Chicago. CME has already sold all of its real estate in the city and the state, Duffy said.

“In our leases, we have a language in there that says if there’s something that’s ill-conceived from the city or the state, that our leases are null and void,” Duffy said on a Bloomberg podcast. “We’re in a very strong position. If we had to leave, we could leave.”

Duffy did make it clear that “we like Chicago,” saying he wants to be “part of the solution, not a part of the problem.” Also, if you listen to the podcast, Duffy made a point to say he realized that campaign rhetoric often changes when people assume office and have to govern.

And Johnson’s own campaign website claims: “We should raise revenues from activities that won’t leave and cost us jobs.”

While Duffy has strong, lifelong ties to Chicago, he is clearly not happy with how the city has been run. Earlier this month, Bloomberg reported that Duffy said: “Three o’clock in the afternoon, my wife got carjacked right in the city of Chicago, and it’s absolutely insane what’s going on here.”

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Duffy said he was also upset with the response he received from then-Mayor Lori Lightfoot about how the homicide rate was falling. “I said, ‘Don’t go there. Please don’t go there.’ One is too many.”

I would assume Duffy has been inundated with offers to move his company elsewhere since the progressive Johnson’s election. Company headquarter locations are very often subject to the whims of the CEO.

Duffy said during his most recent interview he hadn’t yet talked with the new mayor. “I’m hopeful that he reaches out, I don’t care if it’s me or whoever, and talks about these things.”

So, I reached out to the two legislative leaders to see where they stood on allowing home rule units like Chicago impose a tax on electronic transactions.

Spokespersons for both Senate President Don Harmon and House Speaker Chris Welch said their bosses opposed the idea.

This thing is off the table.

Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.


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