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.


* Unions file suit in St. Clair County
* Reader comments closed for the holiday weekend
* AG Madigan files TRO
* In re James Dimas
* Question of the day
* Weirdest. Oppo Dump. Ever.
* Big bucks reported by Zopp, Raja
* LIVE Comptroller Munger press conference coverage
* Yet another clock starts ticking down
* Hey, Cardinal fans...
* Rauner makes cheery visit to Illinois State Museum
* The Tier 2 difference
* *** UPDATED x4 *** Attorney General goes to court
* Credit Unions – Protecting Financial Futures
* GOP legislator wants "temporary, balanced budget"
* Food for thought
* The blame game
* Meanwhile, in the real world...
* When Indiana invaded Illinois
* 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

          
        * Apple Maps vs. Google Maps (Video)
        * Android Community Weekly Digest: Jul. 5, 2015
        * First Few Days with the Oppo R7
        * Our 5 best new Windows Phone apps of the week
        * Curved screens versus flat
        * Motorola Droid Turbo experiences battery issues after Lollipop update
        * [Deal] Flipkart slashes INR 9,000 off the price of the Nexus 6

        * Sony’s Upcoming 4K Network Camera
        * Browse The Web And More With Toshiba’s New 11.6-Inch Laptop
        * Use this trick to boost your phone speaker's volume
        * Ulefone’s Latest 4G LTE-Enabled Android 5.1 Smartphone With 3GB RAM
        * Fred Wilson: The Next Reddit Will Likely Be Built on the Bitcoin Blockchain
        * Facebook Messenger Experiment Lets You Share GIFs Easily
        * Nintendo NX Won’t Be As Powerful As The PS4 [Rumor]

        * Sale heads list of potential Sox ASG reserves
        * White Sox steal another HR from Davis
        * Errors derail White Sox winning streak
        * Orioles 9, White Sox 1: Ugly all over; winning streak over
        * Errors derail White Sox winning streak
        * Sale seeks history against former mentor Buehrle
        * White Sox winning fair share of close games

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


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

        Archives
        July 2015
        June 2015
        May 2015
        April 2015
        March 2015
        February 2015
        January 2015
        December 2014
        November 2014
        October 2014
        September 2014
        August 2014
        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


        * Addressing the fiscal mess in Chicago - Quad-Ci.....
        * Closer Look: Despite Illinois state budget dead.....
        * Illinois Lawmakers Still Negotiating Budget - WIFR..
        * Several Illinois programs could halt if no budg.....
        * Closer Look: Despite budget deadlock, there are.....
        * Bruce Rauner skilled in making Dems scapegoats .....
        * Despite budget deadlock, there are ways out - T.....


        * Boy, 7, killed during violent July 4 celebrations in Chicago
        * Bison thrive on the Illinois prairie; 14 calves born
        * Quincy man charged in shooting that killed 1, wounded 1
        * Danville childhood home of Dick Van Dyke on condemned list
        * Traders recall the 'rush' and 'roar' as famed pits close
        * Closer Look: Despite budget deadlock, there are ways out
        * Dead shows set attendance records at Chicago's Soldier Field
        * 7-year-old boy shot, killed in Chicago over Fourth of July
        * Woman who tries to sneak on planes arrested twice in 2 days
        * East St. Louis paid big legal fees to state senator's firm

        * Despite state budget deadlock, there are ways out
        * Despite budget deadlock, there are ways out
        * Statehouse Insider: Take the over on when this impasse is going to end
        * Springfield School District has paid nearly $500K in pension penalties in past 6 years
        * East St. Louis paid big legal fees to state senator's firm
        * Illinois Senate honors victims of Charleston church shootings
        * Bill would allow cameras in Illinois nursing homes
        * State employee lawsuit seeks assurance of full pay despite no budget
        * U of I freezes administration hiring over budget
        * Attorney General Lisa Madigan seeks court ruling on state payments during budget impasse

        * Toni Preckwinkle's monster
        * Why Caterpillar is letting its geek flag fly
        * How much could Chicago pension payments jack up your property tax bill? Try 30 percent
        * Who's to blame for the summer of governmental meltdown?
        * Can Rauner pit Cullerton against Madigan against Emanuel?


          * Fans revel in U.S. women's soccer team's 'unbelievable' victory
          * Design student revamps cardboard signs to help Chicago's homeless stand out
          * Police boss McCarthy on child's death: 'This has got to stop.'
          * Two men killed in Gresham after shots fired at SUV
          * Woman known as 'serial stowaway' arrested again
          * 3 killed, 27 wounded over eight hours in Chicago, including boy, 7
          * Dad said he rushed dying son, 7, to hospital: 'You cool, I know you cool'
          * Man killed in hit-and-run in Lawndale
          * Inside a weekend crime scene: 'Somebody walked up with a mask on'
          * Three children among four hurt in Elgin fireworks incident


          * Coping while black: A season of traumatic news takes a psychological toll
          * Rauner proposal would advance $450M to help Chicago schools
          * Emails show Emanuel, top officials aware of Clinton's private address
          * After pension payment, Chicago Public Schools to make $200M in cuts
          * CPS, Emanuel warn of deep cuts, layoffs to school district
          * The legacy of Willie Dixon on his 100th birthday
          * Preckwinkle may reevaluate sales tax plan if Springfield acts on pensions
          * At eleventh hour, CPS makes huge pension payment
          * Southwest Side residents work toward racial healing
          * As budget deadline approaches, Illinois faces a government shutdown


          * Fullerton, Konar and Reif: Pope Francis' message a chance for Illinois to plan ethically for climate change
          * Despite state budget deadlock, there are ways out
          * Bernard Schoenburg: Independent redistricting proposal could be on 2016 ballot
          * Statehouse Insider: Take the over on when this impasse is going to end
          * Statehouse Insider: Take the over on when this impasse is going to end
          * Springfield School District has paid nearly $500K in pension penalties in past 6 years
          * Letter: Rauner being set up for a fall
          * Angie Muhs: A year later, optimistic and grateful
          * East St. Louis paid big legal fees to state senator's firm
          * Illinois Senate honors victims of Charleston church shootings


          * Dean Troutman returns home after his 700-mile trek
          * Urbana man arrested following home invasion
          * Peoria teen Emily Coffey will take diabetes cause to Capitol Hill
          * Volunteer opportunities for the week of July 5
          * Causes for Concern for Week of July 5
          * 2015 Champaign County Freedom Celebration fireworks show
          * Best of teams: No. 35, South Carolina
          * Daily Digest 7/5/15
          * Daily Digest: Ceremony to honor forest anniversary
          * Best of teams: No. 36, North Carolina State


          * Ramos homers, drives in 2 as Nationals defeat Giants 3-1
          * Stevenson grad Brunson named MVP in U19 title game
          * Lloyd hat trick leads US over Japan 5-2 for World Cup title
          * Shoe factory collapses in eastern China, killing 13 people
          * Fans cheer as Princess Charlotte christened on royal estate

          * House lawmakers overcome hurdle on key tra...
          * Rodney Davis talks funding with Bloomingto...
          * The agency that fought Illiana gets a new ...
          * Rep. Dold takes educational cruise down Ch...
          * Lawmakers decry high turnover rate of VA h...
          * CBD Oil, and politics
          * Simon considering state Senate bid
          * Killer Congressman Tom MacArthur trying to...
          * Shutdown? State may not notice
          * Rep. Bob Dold

          * Durbin on Overtime Rules - Alton Daily News...

          * Thousands Line Route For Arlington Heights......

          * Carli Lloyd-3; Japan-2
          * I’m betting the NEA RA will say, “No racist flags in schools or public spaces.”
          * NEA RA: It is frequently an out-of-body experience.
          * US Women's Soccer Final Shown At Crew
          * CPS pension bill paid for with the the lives of teachers and students. In debt by design.
          * I will be talking about Confederate flags direct from the NEA RA on WBAI radio Monday morning.
          * Supreme’s agree to hear fair share case. Public employee unions in jeopardy.
          * Why my NBI was more than about the Confederate flag. 
          * Rev. William J. Barber: “The Confederate war flag belongs in a museum — not over or on our state house or on state-issued license plates. It is a symbol of terror, hatred and treason to America’s ideal.”
          * Story can help you and your buyers avoid financial roadblocks


          * State, Teamsters Reach Tentative Agreement - Workers at IDOT, DHS, IDES, and CMS in Cook County to Vote on New Contract
          * Governor Rauner Extends Tax Filing and Payment Deadlines for Businesses and Individuals Impacted by Recent Tornado - Deadlines Pushed to December 31, 2015
          * Illinois EPA Releases Annual Report on Landfill Capacity
          * IDNR Urges Public to Leave Fireworks Displays to Those Who Are Licensed and Trained - Fireworks Show Sponsors Reminded to Check Credentials of Fireworks Vendors
          * Governor Receives Initial Criminal Justice Commission Report




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