The Illinois legislature proposed a tax package that is designed to keep the $CME and $CBOE from leaving the state. Is it enough? Indiana governor Mitch Daniels has said that being next to Illinois is like living next door to the Simpson’s.And to be a bleeped taxpayer.
The bill they will pass will tax roughly 27% of exchange transactions. The rationale for taxing them is the transactions initiate and take place within state borders. That assumption is incorrect. While 15% of the exchanges transactions take place using open outcry on the floor, most of those transactions initiate from all other points in the world. If I were a floor trader, I’d be ticked at Democrats in Illinois. They just gave CME and CBOE an extra incentive to try and close the floors.
The second concept being tossed about is that CME and CBOE shouldn’t be given tax breaks because they are profitable. Does that mean we only give tax breaks to companies that are poorly run and losing money? Profitability of a company shouldn’t ever be a consideration for a tax break.
The core problem is that Illinois is one of the most expensive places to do business in the nation.
Earth to Illinois--you're the one who has fallen off the cliff.
HT the Instapundit.