"The company that owns Chicago's two largest futures exchanges is thinking about moving operations out of state to flee oppressive business taxes. Terence Duffy, chairman of CME Group Inc., which owns the two institutions as well as the New York Mercantile Exchange, and Chief Financial Officer James Parisi announced the financial giant is considering moving operations and jobs out of the state in response to massive increases in state taxes.
Parisi told the company's annual meeting of shareholders that the state legislature's tax hike on corporations from 4.8% to 7% costs CME an extra $50 million a year. Corporations in Illinois also pay 2.5% tax on income, called a personal property replacement tax, which is collected by the state and flows to local governments. The two rates taken together come to 9.5%, the third highest corporate tax rate in the nation. In February, CME reported a 3% drop in fourth-quarter earnings partly because of expenses it booked related to the tax hike.
The ways of Washington, D.C., and Illinois stand in stark contrast with Texas, a state with no income tax, where workers decide for themselves whether to join a union, and that doesn't impose harsh regulatory burdens on businesses or their employees. It recently added to its business-friendly climate with loser-pays tort reform legislation.
Texas eschews while Illinois embraces the Obama model of more government, more unions, more central planning, higher taxes. So it's not surprising that while Obama's Illinois flounders, Texas has created 37% of all new net jobs since June 2009.
Illinois is losing a congressional seat as businesses and people leave. Texas is adding four seats as that state prospers. Build it and they will come; tax it and they will leave."
HT: Pete Friedlander
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