By: Rod Estvan

happy to hear about break from Dems, Tara Stamps does not understand the city's economy

While it is encouraging to hear any discussion of a break from the Democratic Party which has led the labor movement to the disastrous situation it finds itself in today. It was depressing that Tara Stamps is so out of touch with the economic evolution of Chicago's financial sector that she still thinks the Chicago Board of Trade is a major institution.

Both the Chicago Board of Trade and the Chicago Mercantile Exchange have almost no floor traders left. Most trading is now done electronically, so as big institutions their days are more than numbered.

GlenStar Properties, LLC and partner USAA Real Estate Company purchased The Chicago Board of Trade Building in April 2012. Since then the primary new attracted tenants have been tech firms like Houston-based Data Stream which now occupies a big part of the building. Another big chunk is occupied by the Fitness Formula health club.

Rod Estvan

By: Neal Resnikoff

No property tax increase! Make the Rich Pay!

No property tax increase! Make the Rich Pay!

There are reliable estimates that a $1-$2 tax levied on each financial deal at the Chicago Mercantile Exchange and the Chicago Board Options Exchange could raise up to $12 billion a year.

The wealthiest taxpayers in the state do not pay as high a percentage of their incomes in taxes as the poorest and middle-income wage earners, as pointed out by The Institute on Taxation and Economic Policy. (itep.org/who pays/states/illinois. php)

Two our of three corporations in Illinois pay NO income tax to the state according to Crain's Chicago Business. (chicagobusiness.com/article/20140219/)

By: Rod Estvan

financial transaction tax and property taxes

As Neil may be aware the United States had a financial transaction tax (FTT) from 1914 to 1966. The federal tax on stock sales of 0.1 per cent at issuance and 0.04 per cent on transfers. Currently, the US has a very minor 0.0034 per cent tax which is levied on stock transactions. The tax, known as Section 31 fee, is used to support the operation costs of the Securities and Exchange Commission (SEC). In 1998, the federal government collected $1.8 billion in revenue from these fees, almost five times the annual operating costs of the SEC. John Maynard Keynes advocated the wider use of financial transaction taxes and it is not a particularly new suggestion.

Trying to apply a municipal FTT on the Chicago Mercantile Exchange will be very difficult because the vast majority of trades are now conducted and cleared by the CME Corp are electronic. Open outcry trades are now just 1 percent of the CME�s total futures volume. In a few days the CME will cease all floor trading in futures contracts. The options pits, where much of the manpower and activity gravitated, will remain open for now. But eventually they will likely close too.

Effectively Neil this means that the CME will become just a black box that can be located anywhere. In 2014 the CME Corp laid off 5% of its employees, an additional 60 CME group employees are to be laid off shortly. An FTT would have to be a national tax and work in conjunction with the proposed European Union FTT for transactions between financial institutions charging 0.1% against the exchange of shares and bonds and 0.01% across derivative contracts, if just one of the financial institutions resides in a member state of the EU FTT. The EU has yet to get consensus for this tax.

There is yet another problem, Singapore charges a 0.2% stamp duty payable on all instruments that give effect to transactions in stocks and shares. Generally, there is no stamp duty payable for derivatives instruments. Share transactions carried out on the Singapore Exchange via the scripless electronic settlement system do not attract duty, as there is no instrument of transfer. Some of the exchanges even in Europe have talked about going off shore to Singapore if an EC FTT is enacted. The evolution of electronic trading makes a municipal based tax pretty difficult. I suspect since this tax would involve trades originating beyond the borders of Chicago other governmental entities would have to be involved, like the SEC and CFTC. It�s an unlikely option, moreover under the school code Neil no school district has the legal authority to levy such a tax and it would require General Assembly approval of a very major change to the school code, which Governor Rauner would inevitably veto. So in short it is not going to happen in the near term.

The property tax increases being discussed now publicly, have been discussed outside the media for a long time Neil. As you know I have publicly discussed the idea for at least five years now, including at CPS Board meetings during discussion of the budget. Even with property tax increases their will likely be CPS layoffs at some point. I also have serious questions about the legality of one of the property taxes being discussed, that second property tax hike would be based on an untested legal theory that, although CPS is limited by a state law called the Property Tax Extension Limitation Law, the City Council not under the PTELL could authorize an even bigger increase than what�s being recommended and then transfer that money to CPS. I doubt that will work, but it is creative thinking.

Rod Estvan

By: Rod Estvan

one more thing

Under State law school districts do not have a right to levy any type of income tax. The State could increase the tax rate and some of those fund could be sent via general state aid to CPS. The people of Illinois by electing Governor Rauner have effectively vetoed the concept of a progressive state income tax for the next 3 1/2 years and any increase in the current state income tax rate would first have to be used for State services and pensions, before being transferred to school districts.

I like the idea of taxing the most wealthy, but apparently the majority of voters in the State have a different perspective and elected Governor Rauner.

Rod Estvan

By: Larry Duncan

Changes In Tax Laws Will Require Political Upheaval

Rod Estvan provides interesting information on barriers created by current financial transaction laws that stand in the way of taxation. But lets keep in mind that the war on the working class now underway will not come to an end within the routine framework of those existing laws.

Aren't we here like legislators in 1850 debating about existing property laws which require that a runaway slave in Massachusetts must be sent back to South Carolina? How well they understood the minutiae of their legal world, and how little they appreciated the machinery of history operating beneath the surface of legislative proclamations created by dying chattel-slavery feudalism.

There appears to be no way to resolve the crisis of the survival of the working class in Illinois, the U.S., Mexico, Greece, etc., etc., within the framework of local, state, national, and international TPP-type deals and regulations. The working class is now gasping for its life's breath amid the absolute control of government and finance by a small fraction of the population. Clearly, the situation is explosive, unstable, and presages some dramatic leap into a new historic period.

In the video, Tim Meegan suggests various revenue generating solutions that challenge the banks and financial institutions. Existing laws/practices are a barrier to those solutions. This leads to fissures within the Democratic Party, which promotes an outlook that is hypnotized and paralyzed by the existence of laws regulating 0.2% stamp duty in Singapore and such. Of course, a permanent political rupture with the Democratic Party would need to have an international aspect because these TPP/IMF/ECB-generated edicts cannot be shattered just locally, but in tandem with the actions of the global working class.

The CTU march, and Tara Stamps, stopped at the Chicago Board of Trade plaza because it is a symbol: it provides an excellent visual (with the statue of Ceres) and adequate space for a large demo, as compared to the Chicago Mercantile Exchange on Wacker. (The CME, with the CBT, is part of the CME Group, and it's where open outcry floor trading does take place). The Steelworkers back in March held a protest at the CME, with about 1/20th of the size of the CTU June 9 event, and they were spilling out onto the street.

Estvan ends his latest comment by saying: "I like the idea of taxing the most wealthy, but apparently the majority of voters in the State have a different perspective and elected Governor Rauner." Let's look at some important statistics. According to 2010 data (the most recent I could find on this) the voting age population of Illinois is 9,701,000. Rauner's vote total was 1,823,627. That means that only 19% of eligible voters in Illinois voted for Bruce. And this was after he spent $65.3 million! Yes, the people of Illinois have expressed themselves with Rauner's election, but in a way more complex than what Estvan implies. One thing we can conclude is that most of the voters in Illinois are not finding what they're looking for in the existing political system, existing choices at the ballot box, or, as the millionaire tax referendum revealed, existing taxation laws.

-Larry Duncan