Senate President John Cullerton introduced legislation that would cut the state income tax paid by Chicago financial exchanges. The legislation will cut taxes paid by the exchanges by tens of millions of dollars. As you recall, the Chicago Board of Trade, Chicago Mercantile Exchange and the Chicago Board of Options Exchange have all threatened to move out of state because of rising tax rates.
Cullerton’s legislation provides that roughly 27% of the income generated from electronic trading would be subject to the state’s corporate income tax, versus 100% now. Electronic trading is responsible for the majority of income for the exchanges, with roughly 10% of income generated on the floor.
Illinois legislators are also looking to extend tax breaks for Hoffman Estates based Sears. The tax break is an attempt to keep Sears– which like the Chicago exchanges, threatened to move its operations out of state to avoid Governor Quinn’s tax hike– in Illinois. The Hoffman Estates school district decries the plan arguing that the retailer does not pay its fair share in taxes to the school district. Now, Sears pays approximately $3 million a year to the school district; if the tax breaks expire, Sears would owe roughly $14 million annually to the school district.
Although I understand the necessity of keeping big businesses– and jobs– in Illinois, our state’s negotiation with big business on its income tax burden is another example of the richer getting richer. If your business earns enough money, you can threaten to leave the state and get a tax break. Illinois’ small businesses are not getting the same consideration that Sears or CME Group gets.
These large companies moving out of state—or getting the tax breaks that Quinn and the General Assembly has doled out—puts more of the tax burden on Illinois individuals and small businesses, which during a time of continued economic downturn, could really use a break.
As seen by giving out roughly a quarter billion in financial aid to businesses over the past year, Governor Quinn gets the importance of keeping large Illinois companies in Illinois. But what about keeping small businesses in Illinois? What about the individual? We are all getting squeezed by this governor to pay more in taxes and we have not been provided "financial incentive packages." I know my family could certainly use one.