CHICAGO – The Senate Revenue and House Revenue and Finance Committees held a joint hearing Tuesday to discuss the impact and implementation of a “LaSalle Street” tax on trades occurring at the Chicago Mercantile Exchange, the Chicago Board of Trade and the Chicago Board Options Exchange (named for the street on which they reside).
The LaSalle Street Tax (LST) campaign turned out in force with members of National Nurses United, the Chicago Teacher’s Union, Fair Economy Illinois and others packing the hearing in favor of HB106. The bill imposes a small sales fee of $1 on agricultural contracts and $2 on all other futures, futures options and securities index options. Proponents of the tax say that it could increase state revenues by an estimated $10-$12 billion annually.
“People with disabilities are scraping for $500 to pay for home care to live independently, in dignity, while billionaire flash traders can afford $500 million for a couple paintings,” said Fran Tobin of the Alliance for Community Services. “This is out of whack, especially when a small tax on derivatives could end the budget crisis.”
The Democratic Illinois Representative from the 39th district, Will Guzzardi (who is not on any of the above mentioned committees) spoke out against the agenda of Republican Gov. Bruce Rauner saying that he is at fault for the budget crisis in Illinois that has resulted in dramatic drops in funding for education and social services.
“The only thing Democrats have been willing to say is, ‘well we don’t want that’, but what do we stand for? I think we need to be putting forth our agenda that healthcare is a right everybody deserves, that education is a right that every child in Illinois ought to have access to. In order to pay for these things, we’re willing to hold the very wealthy accountable to paying their fair share,” said Guzzardi.
Michael Bronson, recording secretary of the Chicago Teacher’s Union was on hand to draw attention to the havoc that austerity has wrought on teachers and students.
“Gov. Rauner called our schools ‘crumbling prisons,’ that is not a cheery assessment from somebody who should be helping to fund our school system. Every time you see a heinous crime that occurs in this city, somewhere there is a teacher who says that that kid was in my classroom. We come in contact with everyone. If we’re going to get a grip on the rising tide of crime in this city, we need to support our public schools and services,” said Brunson.
The proponents of the bill say that fiscal recovery starts with revenue. Before the panel of representatives, both the proponents and opponents made their cases.
The proponents were quick to highlight that the LST is essentially a sales tax. It applies when people make financial asset transactions. Given that Illinois has two of the largest financial markets in the world (the Chicago Mercantile Exchange and the Chicago Board Options exchange), the tiny $1 to $2 taxes can add up quickly due to the volume of wealth that passes through those institutions.
The opponents fought back with threats to take their businesses out of state. They ignore the fact that taxes such as these are common throughout the world. The huge financial markets in the United Kingdom, Switzerland and Hong Kong are just a few of the world markets that have financial transaction taxes.
The LaSalle St. tax is considered a long shot as it only has one sponsor in the Illinois legislature. It has been in committee since April and centrist-Democrat speaker of the House Mike Madigan controls its future. It would ultimately need a three-fifths majority to pass.
On the national level, the Robin Hood tax, which was co-sponsored by Democratic presidential candidate Sen. Bernie Sanders, is also a long shot but it’s clear that working people and their representatives are actively working against the narrative of austerity.
Photo: Patrick J. Foote/PW