SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
CME Group empties out charitable trust after MF Global scandal

Monday, Dec 19, 2011

* Reuters

CME Group Inc, which has given $22 million to Chicago-area schools and charities over the past five years, has stopped making grants through its main foundation, citing the collapse of MF Global Holdings Inc.

Investigators are still searching for hundreds of millions of dollars of customer funds that CME says were improperly siphoned off in the brokerage’s final days to plug its escalating liquidity needs.

Last month, the exchange operator said it would give former MF Global customers the entire $50 million held by CME Trust, which was originally designed to help traders caught out by a broker default but that in recent years has been a mainstay of the CME’s charitable giving.

* An interesting twist on the MF Global disaster...

Clients of MF Global who lived in Canada lost no money in the collapse. Canada’s regulations do not allow client-segregated monies to be borrowed for speculative purposes. Further, voting and lobbying laws there do not tolerate the sort of corrupt legislative lobbying that is rampant in the United States. Hence, regulators in Canada are far more independent and less affected by lobbying than the regulators in the United States.

* And my syndicated newspaper column looks at the renewed popularity of corporate tax cuts

A massive turnaround in the Illinois House may have whetted political appetites for even more corporate tax relief. But don’t count on it just yet.

As you may recall, a tax cut plan for corporations and individuals failed miserably in the House a few weeks ago, getting less than eight votes — comically short of the 60 needed for passage.

So, the House went home for two weeks, and some intense lobbying began. When state representatives came back to Springfield, a slightly revised version of the corporate tax cut plan passed with a whopping 81 votes. The bill would grant large tax breaks to CME Group and Sears to keep them from leaving the state, as well as a few broad-based provisions.

Most House Republicans had refused to support a proposed increase in the earned income tax credit program for low-wage workers, which was included in the original plan. The Republicans were opposed — even though the program was considered a GOP idea when it was unanimously approved several years ago and signed into law by a Republican governor.

So, that provision and a small bump in the standard income tax deduction were moved to a separate bill. Gov. Pat Quinn and Senate Democrats had demanded an increase in the EITC in exchange for supporting the corporate tax cuts.

Splitting the bill into two parts meant that Democrats could mostly support the EITC while Republicans could get their corporate tax provisions. The plan worked, both bills passed and the corporate tax cut bill was signed into law a few days later.

House Republican Leader Tom Cross (R-Oswego) said he thought that the two-week break had cooled some tempers, which was probably true.

A big push by Chicago Mayor Rahm Emanuel helped, and CME Group’s well-publicized meeting with Indianapolis’ mayor about moving the Chicago-based company to that city just a few days after the tax cut bill went down in flames put added pressure on legislators in both parties.

But the day after the House and Senate had left town, Cross upped the ante by announcing legislation to roll back all of last January’s corporate income tax hike.

Cross was beaten to the punch by 24 hours, however. Some House Democrats with tough campaigns next year had introduced a bill the day before to kill the corporate tax hike by Jan. 1.

Rolling back the corporate income tax increase would cost the state budget about $900 million during the next fiscal year, based on current projections. That would be on top of the more than $360 million in tax breaks that the House and Senate approved last week.

January’s corporate tax boost has created a huge uproar in Illinois as one company after another has threatened to move away. Special tax breaks given to some companies to keep them here have only enraged other company owners who are left holding the bag.

The perception is that the connected big boys are making out like bandits while the unconnected and those who can’t move have no relief in sight.

Both the Illinois Manufacturers Association and the Illinois Chamber of Commerce have vowed to push for lowering the corporate tax rate in the spring legislative session. But lowering taxes on corporations while keeping the higher personal income tax might cause even more political trouble.

As it is, two-thirds of all companies don’t pay the state corporate income tax, partly because many small-business owners set up their companies so they pay taxes on profits via their personal income tax. Cutting the corporate rate without touching the personal rate wouldn’t help those smaller businesses.

And then there would be the understandable resentment of all the working people who weren’t getting tax breaks in these tough times as they view corporations again getting special treatment. As with most things, it ain’t as easy as it looks.

These latest proposals are probably all about election-year politics anyway. Barring some unforeseen miracle and/or a newfound desire to cut ever deeper into the state budget, there’s no way Illinois can afford to get rid of the corporate tax hike.

Instead, the governor will likely continue handing out tax breaks on a company-by-company basis, creating ever more resentment by those who are paying full freight.

* A recent example of the state’s ongoing budget problems

A home-visiting program operated by Springfield’s Family Service Center for 70 low-income teenage parents will shut down this week because of chronic delays in state payments.

The not-for-profit center’s board voted last week to indefinitely suspend the Young Parent Support Services program — designed to prevent child abuse and promote educational success — after the state’s ongoing budget crisis led to a payment delay of six months and counting.

Federal funds to support home-visiting programs arrived on time at the Illinois Department of Human Services, but that money has been delayed because matching state funds have been unavailable.

The state says it cannot pay out the federal money until a certain level of matching state funds is reached.

* Related…

* What does Sears deal do for District 300?

* Statehouse Insider: Mystery funding for Illinois business tax cut: Any time talk turns to budget cuts, Republicans cite Medicaid, the program that pays for health care for poor people. Cross said he has met with a firm that looked at the state’s Medicaid eligibility and believes the rolls are rife with people who may not be eligible. Cross believes the state can save $1 billion, much of it coming from booting those who are ineligible. There already have been problems with implementing a Medicaid reform law passed by lawmakers earlier this year, which, incidentally, was projected to save only $774 million over the next five years. Federal regulators decided earlier this year that two of the income-verification methods in the reform bill could not be used. Republicans do not believe the Quinn administration fought hard enough for the bill with the feds.

- Posted by Rich Miller        


16 Comments
  1. - wordslinger - Monday, Dec 19, 11 @ 9:43 am:

    –January’s corporate tax boost has created a huge uproar in Illinois as one company after another has threatened to move away.–

    And how many did? Last I checked, Jimmy Johns still had their hq in Champaign. Wasn’t he the face of outrage back then?


  2. - PublicServant - Monday, Dec 19, 11 @ 10:04 am:

    -”Canada’s regulations do not allow client-segregated monies to be borrowed for speculative purposes. Further, voting and lobbying laws there do not tolerate the sort of corrupt legislative lobbying that is rampant in the United States.”

    Our neighbor to the north has a lot of good ideas that I think we should look at more closely. This one exemplifies the fact that not only do we need to implement additional common-sense regulations on business, it puts to rest the notion that the “job-creators” really, really want to create jobs, but because of the big, bad regulatory environment, well, they’re just confused and paralyzed.


  3. - gg - Monday, Dec 19, 11 @ 10:09 am:

    Wordslinger your vision is myopic.

    The Corporate Income Structure in Illinois benefits the 90% of businesses who can game the system and pay little or no tax. So 10 % of businesses who are “traditional C corporations” or large employers who are not nimble enough to work around the Illinois income tax pay the 2.7 billion dollars that Illinois collects.

    You do not understand the implications.
    When the State of Illinois specifically targets manufacturing type companies for tax and lets all other companies skate, the manufacturing companies are leaving. The R&D Credit is like removing a pimple off the elephant.
    The system is broken. The politicians and the public do not see our state collapsing.
    Illinois will die without manufacturing jobs.

    Alberto Culver. 2000 employees … 3 - 4000 support jobs … 1000 contracting jobs

    Klein Tools 1000 employees … etc.

    These are just the big companies that make the news.

    Think of all the smaller support manufacturing that follows them.

    Do you know anyone that works in a factory?


  4. - Left Out - Monday, Dec 19, 11 @ 10:11 am:

    School District 300 will probably see little change after it receives additional money from the Sears complex. As stated, there have been major budget cuts in D 300 over the last few years. However, educational spending has increased in all but one of these years. Keep in mind that ‘budget cuts’ and ’spending cuts’ are not the same thing and that even with a ‘budget cut’ spending can increase.

    Spending on instruction in D 300, as reported by the ISBE, for the last six reported years (2011 first and 2006 last) was: $5583 (2011 data), $4964, $5343, $ 5224, $5194, and $4902 (2006 data). At Dundee-Crown High School, part of D 300, the percent of high school students who meet or exceed ISBE standards for the same years was (2011 data first and 2006 last): 44% (2011), 43%, 43%, 40%, 46%, and 43% (2006 data).

    Over the period spending per student went up 10% while the percent of students who meet or exceed ISBE standards went up 1% (and in between went both up and down). There is no clear relation in D 300 between instructional spending and achievment.


  5. - Yellow Dog Democrat - Monday, Dec 19, 11 @ 10:31 am:

    @gg -

    The exodus of manufacturing jobs not only started before the tax hike, it occurred while Repulicans controlled the governors mansion, the State Senate, and had a working minority in the House.

    Illinois lost 160,000 manufacturing jobs while George Ryan was governor. These losses were mainly due to global economic shifts brought on by deregulation like NAFTA.

    You are entitled to your own opinion, but not your own facts.

    And the stubborn fact is that Illinois has added more jobs than any other midwest state since the tax hike was enacted.


  6. - gg - Monday, Dec 19, 11 @ 10:48 am:

    YDD

    Do you believe Illinois can have a healthy economy without manufacturing?

    If so, our opinions differ. Lawyer, Doctors, CPA’s and other service professionals do not pay corporate income tax.

    Are the unemployed 99%er’s going to be servive professionals? Who is going to pay the corporate tax?


  7. - wordslinger - Monday, Dec 19, 11 @ 10:50 am:

    –The Corporate Income Structure in Illinois benefits the 90% of businesses who can game the system and pay little or no tax. –

    Dude, that’s a selling point to attract businesses, not a reason for them to leave, in my myopic view.


  8. - dave - Monday, Dec 19, 11 @ 11:05 am:

    **Who is going to pay the corporate tax?**

    The corporate income tax is actually a very small portion of state’s revenue.


  9. - Anonymous - Monday, Dec 19, 11 @ 11:14 am:

    Even if he’s right, which he probably isn’t, what exactly is accomplished by booting people off of Medicaid? They won’t stop getting sick, just because they no longer have Medicaid coverage. So hospitals will still have to treat them, but without getting paid.


  10. - 1776 - Monday, Dec 19, 11 @ 2:03 pm:

    @ YDD…

    Of course Illinois has added the most jobs of any Midwest state - we are the largest state in terms of population. Try using the percentage of jobs (for a fair comparison) and we’re at the bottom.


  11. - Left Out - Monday, Dec 19, 11 @ 2:13 pm:

    As of the October Monthly Report on Revenue from the Illinois Dept. of Revenue, actual year to date tax income was (all in $ millions):

    Individual income tax $708.3M
    Sales tax $543.1M
    Lottery & Riverboat $94.8M
    Corporate income tax $73.5M

    This makes me wonder how can one riverboat generate as much in taxes for Illinois as 10,000 or so other corporations? Why set up a company if it is so unprofitable?


  12. - Rich Miller - Monday, Dec 19, 11 @ 2:19 pm:

    Left Out, you’re not looking at the right numbers.

    Year to date so far is $5.9 billion for personal income tax and $695 million for corporate income tax with $154 million riverboats. http://www.ilga.gov/commission/cgfa2006/Upload/1111revenue.pdf


  13. - Left Out - Monday, Dec 19, 11 @ 3:59 pm:

    You are correct, I picked the values from the wrong column of the report. In addition your nubers are for Nov. while I was looking at Oct.


  14. - Rich Miller - Monday, Dec 19, 11 @ 4:03 pm:

    Lesson: If something looks really outta whack, the first thing to do is check to see if you’re looking at the correct data.


  15. - Yellow Dog Democrat - Monday, Dec 19, 11 @ 7:37 pm:

    @1776 -

    So let me get this straight:

    If the Cubs improve their record from 71 wins this year to 85 wins next year, while the Cardinals improve their record from 90 wins to 100, you would argue that the Cubs are a better team because they showed the greatest relative improvement? Even if the Cardinals beat them every single time and repeat the World Series??

    That, my friend, is crazy.

    Yes, Illinois is a more popular place to live than Wisconsin or Indiana. Coincidentally, Illinois also has the highest per capita income in the Midwest.

    In fact, for all of the ranting about how great Texas is, Illinois’ average income is almost $4000 per year higher.

    These are not counter arguments to Illinois’ success. They just bolster the argument even further.


  16. - whetstone - Tuesday, Dec 20, 11 @ 4:39 pm:

    “So 10 % of businesses who are “traditional C corporations” or large employers who are not nimble enough to work around the Illinois income tax pay the 2.7 billion dollars that Illinois collects. ”

    A good point by gg. Was looking at state tax data the other day, and the changing ratio of C and S corps plays a nontrivial role (IIRC from the data) in falling corporate tax revenues.

    Lots of folks (Hinz et al) have called for a more sensible corporate (and otherwise) tax system. Makes sense… but you have to consider the benefits to pols of an opaque, nonfrictionless tax system. Can’t help but think that’s part of the problem in reforming it.


Sorry, comments for this post are now closed.


* IFT endorses Quinn
* Right and wrong
* Question of the day
* Department of Insurance says insurers can't discriminate "based on gender identity"
* Today's quotable
* Rauner group files appeal in term limits case
* Inversion politics
* $300,000 a week in July
* About those new polls
* Today's number: 59 percent
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * ZAGG Rugged Folio for iPad mini review (Video)
        * Chartboost, Chukong Link Up To Bring Mobile Game Cross-Promotion To Chinese Developers
        * Modbook launches Kickstarter campaign for Modbook Pro X Mac tablet
        * T-Mobile welcomes very affordable Samsung Galaxy Avant
        * The Philips Hue Tap Proves An Elegant Accessory For Connected Smart Lights
        * Cortana keeps getting smarter, new questions supported
        * Sony schedules its IFA press event; get ready for some new phones

        * Modbook Pro X Is A Tablet That Runs On OS X
        * One tiny new app takes on social networking’s impossible noise overload problem
        * The Flag-Filled Workspace
        * Neverwinter MMORPG Coming To Xbox One In 2015
        * Best Buy CEO Thinks Tablet Sales Are “Crashing”
        * Ex-Microsoft Evangelist Thinks They Should Drop Windows Phone For Android
        * 1Password Integration With iOS 8 Demonstrated On Video

        * Personal stats nice, but Abreu wants to win
        * Avisail, Lindstrom ready to go on rehab assignments
        * White Sox top pick Rodon debuts at Class A
        * White Sox pitcher Jones has Tommy John surgery
        * White Sox pitcher Jones has Tommy John surgery
        * After trade deadline, newest White Sox may be old ones
        * White Sox cruise after thrashing Tigers in seventh


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * College of DuPage Gone Wild ! - Edgar County Wa.....
        * Create a custom date range - RedEye Chicago..
        * Rail car builder adding 90 workers in Rochelle .....
        * Railcar builder adding 90 workers in Rochelle -.....
        * Gov. Pat Quinn Open to Helping Out Children Who.....


        * Governor candidates assess overseas tax breaks
        * Chicago mayor proposes hike in hourly minimum wage
        * Quinn signs epinephrine law for Illinois schools
        * Charges upgraded to murder after Palatine fight
        * Body of missing Chicago man found in Lake Michigan
        * Man seeks withdrawal of plea in fatal stabbing
        * Police search for trucker after fatal I-70 wreck
        * Illinois Medicaid restricts use of hepatitis drug
        * Trial begins for man accused of deadly house fire
        * Court filing details carnage of fatal bank robbery

        * 'Headlines' in Rauner campaign ad don't match up
        * Quinn signs epinephrine law for Illinois schools
        * Governor candidates differ on overseas tax breaks
        * Quinn: State will 'prevail' in Shakman lawsuit
        * Illinois Medicaid restricts use of hepatitis drug
        * Quinn OKs ballot question on tax hike for incomes over $1M
        * Lawsuit against Quinn back in court in October
        * Illinois to ask voters about taxing millionaires
        * Illinois State Fair manager fined by ethics commission for accepting free beer tickets
        * Sangamon County on its own for road salt

        * Emanuel proposes hike in hourly minimum wage
        * Allstate's second-quarter profit rises 41% on sales gains
        * Japanese firm Nippon Sharyo expands Illinois rail car plant
        * Boeing to build largest Dreamliner in South Carolina plant
        * Swing by a Walgreen's for a rental car?


        * Secretive aldermen pull down blinds
        * Cop killer removed as baseball coach, but league official says past was no secret
        * Deadlocked committee delays vote on City Council budget analyst
        * Man gets 20-year sentence in Wicker Park choking, stabbing case
        * Convicted killer’s hearing for new trial pushed back to Friday
        * VA manipulated vets’ appointment data in Chicago, elsewhere, audit finds
        * Man dead, off-duty police officer wounded in Bucktown shooting
        * One killed in multi-vehicle crash in Edgewater involving CTA bus
        * Teen charged in murder of 16-year-old boy in Chicago Lawn home
        * Watchdog needs independence


        * Evanston bans plastic bags in bigger stores starting next year
        * New law lets more school workers use emergency injection on students
        * As CHA socks away millions, HUD calls on agency to expand vouchers
        * Blogger sues CTA for documents related to Ventra contract
        * Construction worker injured in wall collapse along I-90
        * 2 charged in Hammond shooting that injured Addison mom, daughters
        * Aldermen want red light camera hearing at City Council
        * Aldermen want red light camera hearing at City Council
        * Baseball coach convicted of killing cop in '89 resigns
        * Southwest Side bank robbed


        * New Law Lets School Staff Administer EpiPen Dosage...Not Just Nurses
        * Two Teachers Unions Back Quinn Despite Pension Strife
        * Jane Byrne closer to getting memorial
        * Jane Byrne to be honored
        * On education, candidates for Illinois governor closer than they think
        * Authorities Investigating Downtown Bomb Threat
        * Authorities Investigating Downtown Bomb
        * Governor Approves 'Millionaire's Tax' As Advisory Referendum
        * Christian Co. Shooting Leaves Man Dead, Officer Wounded
        * Excavation Finds Courthouse Where Lincoln Worked


        * Quinn signs epinephrine law for Illinois schools
        * Travis Akin: Lawsuit reform could improve Illinois’ business climate
        * George Will: A middle course on foreign policy
        * Eugene Robinson: Absent on immigration reform
        * Governor candidates differ on overseas tax breaks
        * Quinn: State will 'prevail' in Shakman lawsuit
        * Illinois Medicaid restricts use of hepatitis drug
        * Our Opinion: MacArthur Boulevard Association’s success worth replicating
        * Lawsuit against Quinn back in court in October
        * Quinn OKs ballot question on tax hike for incomes over $1M


        * Carbondale man sentenced to six years
        * Officials looking for eight lost hikers in Pope County
        * Four injured in wreck in Saline County
        * Modern Woodmen planning Race to Knock Out Hunger
        * Three Carbondale men arrested
        * Sports Talk 7-30-14
        * Carbondale man sentenced for bank robbery
        * Fifth-Hill group excited to hear Davis' office asking U.S. EPA to check site reports
        * Plea in weapons case brings 3-year prison sentence
        * Three arrested in connection to stolen property


        * Powell maybe not told early about CIA techniques
        * Fed offers a dual message on health of economy
        * Liberia's president closes schools amid Ebola
        * Vandals target Rolling Meadows site where trees removed
        * Gigantic magnet moved to permanent home at Fermilab

        * Rep. Lipinski Issues Statement on Presiden...
        * Rep. Lipinski Helps Pass VA Reform Bill - ...
        * Scaletta Armoring Hosts Congressman Dan Li...
        * Congressman Dan Lipinski to host 3 events ...
        * House passes Lipinski bill for Herbie John...
        * Renaming of Mount Greenwood post office in...
        * Rep. Lipinski's Bill Improving Internation...
        * Rep. Lipinski Announces $206428 Grant for ...
        * Rep. Lipinski's Bill Renaming Mount Greenw...
        * Rep. Lipinski Issues Statement on Presiden...

        * Extra Extra: Multi-Vehicle Crash Kills 1 I......
        * Extra Extra: Multi-Vehicle Crash Kills 1 I......
        * Extra Extra: Multi-Vehicle Crash Kills 1 I......
        * Congressional Democrats Introduce Bill to ......
        * Congressional Democrats Introduce Bill to ......

        * How Partisanship Could Save Iran Diplomacy......

        * Ten minute drawing. What’s that noise?
        * No ten minute drawings for the next few days.
        * U.S. Economy Grew At Strong 4 Percent Rate In Spring
        * Chicago City Council Roundup: Minimum Wage Bump, Phone Tax Hike & New Moratorium
        * Terror Threats At Chemical Plants Underestimated
        * Chgo Lawmakers Poised To Reduce IG's Purview Over Campaign Finance Probes
        * Chicago SRO Press Conference At City Hall
        * Anti-War Activists State 'Die-In' Against Boeing At City Hall
        * Illinois Warns Insurers Of Discrimination Ban
        * Suing Obama: GOP-Led House Gives The Go-Ahead


        * Pat Quinn: Patronage Will Prevail
        * Governor Quinn and Company Officials Open Nippon Sharyo Expansion in Rochelle - Passenger Rail Car Manufacturing Plant Expansion Creating 90 New Jobs
        * Governor Quinn Signs Legislation to Expand Life-Saving Measures in Illinois Schools - Expands Epinephrine Law to Protect Illinois’ Students in Life-Threatening Emergencies
        * Pat Quinn’s Reality Check
        * Governor Quinn Signs Legislation to Give Public a Voice Regarding Millionaire Tax for Classroom Education - Law Establishes a Statewide Advisory Referendum on Nov. 4 Ballot




            Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller