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*** UPDATE *** From the Sun-Times…
Sears executives have visited potential new headquarters sites in Austin, Texas, and Columbus, Ohio, but say they remain open to negotiating with Illinois officials to keep the retailer’s headquarters in Hoffman Estates.
The Sears leaders visited potential sites, toured offices and met with municipal, business, state and economic development officials in Austin and in Columbus, sources said Wednesday.
Sears officials expect to make a decision by the end of the year.
* If the union’s contract is ratified, Illinois will get some good job news…
The UAW and Ford reached a tentative agreement on a new contract that will mean 2,000 new jobs in the Chicago area, including 1,100 new jobs and a new shift at the company’s Chicago assembly plant next year if workers approve the deal, the union and Illinois politicians said Tuesday.
Ford now employs roughly 2,700 workers in Chicago at the Torrence Avenue plant, which produces the Lincoln MKS, Ford Taurus and Ford Explorer on two shifts. It also employs 900 workers at its Chicago Heights stamping plant.
Ford plans to add 1,100 workers at the Chicago assembly plant next year and an additional 900 workers at the stamping plant and assembly plant within the next four years.
Both Gov. Pat Quinn and Mayor Rahm Emanuel said (separately) yesterday that they’d been working with Ford to help facilitate the new jobs.
*** UPDATE *** The Sun-Times reports that Mayor Emanuel’s agreement to cut the head tax in half was behind Ford’s decision to expand employment…
The $4-a-month employee head tax despised by Chicago businesses would be cut in half, depriving the city of $23 million in annual revenue, under a surprise ordinance proposed by Mayor Rahm Emanuel on Wednesday.
Emanuel campaigned on a promised to phase out the head tax over four years by lopping off $1 from it each year.
But he opted to do it twice as fast — and eliminate the tax entirely by July 2014 — because the deal that nailed down as many as 2,000 new jobs at a Far South Side Ford plant was contingent on the phase out.
“This was a significant piece of helping us secure the 1,200 jobs at the Ford plant and what they’re gonna add also to the stamping plant across the street. It’s another 700” jobs, the mayor said.
* But, CME Group’s Executive Chairman Terrence Duffy continues to grumble loudly about Illinois…
International expansion aside, CME’s Duffy again raised the possibility that the CME could relocate its headquarters to another state to escape Illinois’ “outrageous” and “inappropriate” taxes.
Illinois raised taxes earlier this year, and several other states are wooing CME with proposals that Duffy called “viable.”
Duffy said he is working with Illinois Governor Pat Quinn, state legislators and Chicago Mayor Rahm Emanuel to find a solution that would keep CME in the city, but said he has a “fiduciary duty” to do what is best for shareholders.
*** UPDATE *** Interesting…
A deal to keep CME Group Inc. from bolting the state could be reached as early as the start of the legislature’s veto session this month, Gov. Pat Quinn said Wednesday.
An agreement aimed at reducing the corporate income tax liability for the company, which is the parent of the Chicago Mercantile Exchange and the Chicago Board of Trade, would require approval of the General Assembly, Quinn said.
posted by Rich Miller
Wednesday, Oct 5, 11 @ 6:09 am
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It’s all about give me more so I’ll stay. And when that runs out, it’s give me more so I’ll stay.
A never-ending cycle of greed.
Comment by Aldyth Wednesday, Oct 5, 11 @ 7:03 am
It is not about corporate greed, it is about the greed of Unions and their political backers that want to raise taxes to pay for their pensions and scholarships for their relatives. What do you expect businesses and people to do when you squeez them for every nickle? They want to leave.
Comment by Tommy Wednesday, Oct 5, 11 @ 7:39 am
Really! Corporate America is no better than the rest and just as guilty. Coporations buy and sell votes like a second hand thrift sale. Money in hand screams.
Comment by oscaroutofthecan Wednesday, Oct 5, 11 @ 8:19 am
I wish someone would hash out the CME and CBOE stories more fully. I have more questions than answers.
–Duffy has said the trading floors would remain in Chicago. What exactly are they talking about moving? What does that mean for jobs and economic activity?
–Duffy and Brodsky are major political players and contributors. Where were they when the tax increase was going down in the lame-duck session?
–If, as some say, because of electronic trading, exchanges can locate “anywhere,” why do the world’s largest exchanges remain in high-tax and/or high-cost-of-living cities like New York, Tokyo, London and Hong Kong?
– If you can locate “anywhere,” why is totally electronic NASDAQ headquartered in high-tax, high-cost New York?
Could it be that by their very nature exchanges need to locate in large metros for specialized talent and advanced communications and infrastructure? Not to mention the cultural amenities and cosmopolitan lifestyle?
Comment by wordslinger Wednesday, Oct 5, 11 @ 8:45 am
Tommy,
Way to be a sucker for the filthy rich in this country! Just keep arguing that they should have more while you settle for less. That’s just brilliant. JP Morgan would be proud.
Comment by Bill Wednesday, Oct 5, 11 @ 9:01 am
I think Aldyth has it right.
No matter how much money you give the State, it is never enough. It is a greed that is boundless…..
Comment by Plutocrat03 Wednesday, Oct 5, 11 @ 9:09 am
Yes, Illinois did recently raise taxes but our tax rates are still lower than Republican controlled Indiana and Wisconsin. Corporate America just wants us to engage in a race to the bottom so they can reach even higher levels of astronomical wealth.
I think these two stories show a good juxtaposition of the two separate paths our nation can take. I prefer the one that puts money in the pockets of working families. Our labor and our consumption is the true engine of job creation.
Comment by Anonimo Wednesday, Oct 5, 11 @ 9:15 am
Yeah, the CME will have an easy time attracting top talent to Birmingham, Alabama. They can just hand their market share over to the Frankfurt and London exchanges. You know, their competitors in super low-tax jurisdictions.
Comment by Lakeview Wednesday, Oct 5, 11 @ 9:43 am
wordslinger-exactly. Very good questions.
Let me add one more: It was widely reported that after the CME-CBOT merger that the CME received TIF subsidies to assist in their move - consolidation from 2 buldings to one location at the CBOT building. How much did they receive and what were the terms of that assistance?
And for those unfamiliar with the area, the CME moved, oh, maybe a couple blocks south and east (Wacker) to the CBOT (Jackson and LaSalle).
Yep, Terry-you really needed TIF dollars for that “economic development activity” - a simple consolidation/relocations.
Comment by former runner Wednesday, Oct 5, 11 @ 9:46 am
Greed by the ultra-wealthy his nothing new. The level that they are manipulating such a large number of politicians and convincing (former) middle class citizens that they deserve even more is what has surprised me. Might be becoming an overused saying but its true- it is a race to the bottom for the former middle class…
Comment by Roadiepig Wednesday, Oct 5, 11 @ 10:06 am
We certainly have lined up our demons on this one, haven’t we? I am reminded of the old horror movies of the 30’s I used to watch on “Creature Features” back in the 70’s. Torches and pitchforks being wielded by the townsfolk as they march up the hill to confront the monster and his maker.
Too easy to blame all the woes of our current economy on those “filty rich” as Bill puts it. A more deliberate review of the evidence has both sides of the political aisle sharing the blame with unions/pensions being a big piece. As many remark here, Illinois politics has been dominated by the democratic party yet folk here write that the GOP is more to blame because they don’t take a stand.
Yep, it’s true, “greed by the ultra-wealthy his (sic) nothing new”. The manipulation of politicians by this group reminds me of my own union, AFSCME, and their manipulation of our gov into insuring that no lay-offs or facility closing will occur until 2012 which neatly coincided with the endorsement of PQ by that self same union. Yep, greed is in full view in Illinois.
Frankly, to associate a desire to avoid paying taxes with greed would make many of us greedy. Who here uses amazon.com to avoid paying taxes? Who here uses the mtg deduction to lower their taxes? Who here drives a few miles to avoid paying higher taxes on food/gas/other stuff? Does that make us greedy? Or does it just make sense to lower our daily costs?
Comment by dupage dan Wednesday, Oct 5, 11 @ 10:30 am
CME is bluffing, and Mitch Daniels inadvertently outed their strategy earlier this week when he fessed up that the package CME said was waiting for them in Hoosierville was not quite as golden as they had earlier let on. This is salesmanshpp and poker, with CME trying to scare Quinn into giving up more concessions than he needs to.
Comment by Gregor Wednesday, Oct 5, 11 @ 10:37 am
Unions have little to no political power left and it’s been that way for years. You just can’t blame them for our current woes Dupage Dan.
The fact that in Chicago & Illinois - the last bastions of union strength - they’re being used as punching bags by Quinn & Emanuel speaks volumes.
Comment by Anonimo Wednesday, Oct 5, 11 @ 10:37 am
Regarding the CME (and CBOT), I loved Rich’s juxtaposition yesterday of this item with Morthland’s sales tax exemption for certain farm equipment. I thought it was interesting that two separate but related entities were seeking a handout because, according to them, taxes are killing their industry.
If CME and or CBOT wants to move, they’ll be missed. They can speculate on the price of commodities from anywhere, and continue to manipulate global commodities to their advantage, screwing everyone else in the process. Good luck to them. Unfortunately, farmers can’t move their land into neighboring states, so they’ll have to find some way to make it work here.
But to be consistent, if you don’t like Morthland’s bill, you can’t really support tax incentives for CME/CBOT either. Maybe once we figure this out, we can do something meaningful about tax reform and tax fairness that works for everybody, not just those with compelling stories to tell or those who threaten to move.
Comment by 47th Ward Wednesday, Oct 5, 11 @ 11:20 am
– If you can locate “anywhere,” why is totally electronic NASDAQ headquartered in high-tax, high-cost New York?
Bankruptcy courts and attorneys (South District of NY and Northern District of Illinois) v. “sculptures”?
Comment by Anonymous Wednesday, Oct 5, 11 @ 11:30 am
–Too easy to blame all the woes of our current economy on those “filty rich” as Bill puts it. A more deliberate review of the evidence has both sides of the political aisle sharing the blame with unions/pensions being a big piece.–
Exactly how do “unions/pensions” factor into the “woes of our current economy?” It rolls off the tongue nicely, but when you break it down, it appears to e meaningless.
Comment by wordslinger Wednesday, Oct 5, 11 @ 12:23 pm
Personnel costs are a major part of what it takes to run a government. It is incontrovertible that we have gone from underpaying people for their work to in some cases overpaying them. I can tell you that in my locale each and every fully trained police officer made more than 100K plus benefits last year (including overtime)
If we are to be honest with our public budgets, we have to make sure we are funding the short term and long term costs in a pay as you go fashion. We have not for a long time. What is needed is more revenue, or lower costs which translate into fewer people, or lower paid people.
Now before everyone jumps on the bandwagon to tax the evil rich more, consider what “they” pay already. I only have national numbers, but the local numbers are not likely to be too far off. In tax year ‘08 the top 10% of taxpayers (threshold of $113,800) paid 69.94% of all Federal income taxes. I think we can agree that the 113K income earner does not belong in the label of filthy rich. How much more of the overall bill should this group of people pay?
Corporate taxation is also a very complex story, but one of the theories that allowed for corporations to pass their profits to the stockholders at a lower corporate tax rate was that the government would collect more taxes from that revenue stream if were taxed at personal rates.
It would seem to me that a reform of the entire tax system is in order. Decades of tweaking the tax code in order to encourage or direct specific behaviors have created a system that is intrinsically not fair. e.g. do we really need to offer mortgage deductions for second or third homes (or even the first), or tax breaks to buy toys like electric cars (regular folks don’t buy them.) Fixing this will outrage all. It is not a task for the modern politician who is driven by special interests.
Comment by Plutocrat03 Wednesday, Oct 5, 11 @ 12:28 pm
Pluto, in one breath you bemoan the fact that your local cops make a $100K with bennies and overtime, and in the next you suggest that $113K is a middle-class income.
Are you suggesting cops are overpaid earning a middle-class income? Try that job a couple of nights, and you might change your mind.
Comment by wordslinger Wednesday, Oct 5, 11 @ 12:58 pm
I will also add that they already told everyone that they would rather not move. See the “disruption” it would cause and how short-sighted the “vanity” of an “international city” v. “defending” a “finance capital” is when applied to dollars and cents?
Comment by Anonymous Wednesday, Oct 5, 11 @ 1:11 pm
=It is not a task for the modern politician who is driven by special interests.=
Amen.
Comment by Anonymous Wednesday, Oct 5, 11 @ 1:19 pm
I did not moan, or assert that 113K is middle class. I did point out that this is the ENTRY level income for police officers.
My point is that the revenues must match expenditures. Some jobs are overpaid. I am not singling out police. The pay range of the town’s receptionist, starts at over 30K and the rage goes in to the 40K range with experience. Not exactly what you see in the private sector.
Comment by Plutocrat03 Wednesday, Oct 5, 11 @ 1:21 pm
Notice what kinds of cars are going to be built at the new plant. What, no Ford Focus Electrics?
Comment by Cincinnatus Wednesday, Oct 5, 11 @ 1:21 pm
Oops, by the way I did not include benefits in those numbers. Those would be on top of what comes in the paycheck.
Comment by Plutocrat03 Wednesday, Oct 5, 11 @ 1:24 pm
I’m somewhat surprised Ford and UAW reached an agreement. There was a CNN Money article earlier this year saying Ford was the only big three manufacturer that could have run into trouble with the auto workers. Apparently the bailout Chrysler and GM accepted from the Fed also gave them new deals with the unions. Of course by not taking the Fed bailout deal, Ford was the only domestic automaker with soon-to-expire union deals.
Comment by Dirty Red Wednesday, Oct 5, 11 @ 1:24 pm
DR, I believe Chrysler has not yet cut a deal with the UAW.
Comment by Rich Miller Wednesday, Oct 5, 11 @ 1:25 pm
“It is incontrovertible that we have gone from underpaying people for their work to in some cases overpaying them.” -Pluto
Not only is that very controvertible, my friend, it is also wrong. I believe the August ADP report showed that state and local govt’s are shredding payroll faster than even the private sector. However, taxpayers still want services and govt’s are called upon to provide extra servies during an economic downturn.
What is incontrovertible is that the super weathy are getting wealthier, while the rest of us fall behind.
If its true that “In tax year ‘08 the top 10% of taxpayers (threshold of $113,800) paid 69.94% of all Federal income taxes” thats good. They now own about 75% of all the wealth in the country.
Comment by former runner Wednesday, Oct 5, 11 @ 1:31 pm
Cincinnatus, the Ford assembly plant in Chicago was retooled several years ago to add the Ford Explorer to the Ford Taurus and Lincoln MKS production lines, all of which share the same platform. I believe Ford modernized a former SUV assembly plant in Wayne, MI to build the electric Focus, alongside the conventional Ford Focus. The lithium-ion battery packs for the vehicle will be initially built in South Korea, while a battery manufacturing plant is completed near Holland, MI. By the way, the assembly plant in Wayne will have solar PV panels, battery-powered trucks and electric vehicle charging stations.
Comment by Going nuclear Wednesday, Oct 5, 11 @ 2:21 pm
And he has not thought this through that a line will form of all the others who want the same consideration?
I am sorry but I am thinking of changing my name on this blog and piggybacking on another commentor. I am toying with “HemakesBlagolooklikeaSaint”
I agree with those commentors who see this as CME’s push to get a big incentive like PQ has given to every other large corporation that has threatened to leave. Some times a line has to be drawn and the handouts end.
We are closing state facilities and adding thousands more to the unemployment lines. We are reneging on contractual agreements where the other party has done their part to generate or suggest savings for the state. And all of this because there is not enough money appropriated to cover all the costs. Yet our illustrious leader is spending like a drunken sailor on shore leave.
Someone needs to sit him down and take out the Land of Lincoln, Great State of Illinois record and pump some reality into this boy.
Comment by Irish Wednesday, Oct 5, 11 @ 2:24 pm
–By the way, the assembly plant in Wayne will have solar PV panels, battery-powered trucks and electric vehicle charging stations.–
Dude, if you want to give Cincy a stroke, why don’t you just add that it will have wind turbines and be served by high-speed rail, too?
Comment by wordslinger Wednesday, Oct 5, 11 @ 2:26 pm
Again, with all these corporate deals, would it be cheaper to just cur our corporate tax rates?
Comment by Ahoy Wednesday, Oct 5, 11 @ 2:55 pm
very controvertible?
Other than the class warfare boilerplate you included, who are the super wealthy ? Do you believe that school superintendents are part of that class?
Do you really believe that no governmental jobs are overpaid? Really?
Comment by Plutocrat03 Wednesday, Oct 5, 11 @ 3:13 pm
Not recognizing the drag on the economy in Illinois that poorly funded union pensions have is curious, word. The fact that either taxes have to be further raised, funds must be borrowed and/or cuts made in other services in order to restore the state employee pension funds is clear. That many here bemoan those facts is clear. That either one of those fixes alone or in combination can have a negative effect on the state economy should be clear.
I could have added other things to that piece but ran out of time.
The idea that unions have little power may be true in the private sector but that has not been true with public employee unions, whose power has only recently been challenged - the results of which are still in doubt, regardless of what Emanuel and Quinn have done, Anonimo.
Comment by dupage dan Wednesday, Oct 5, 11 @ 3:22 pm
===I did point out that this is the ENTRY level income for police officers.===
Where in Illinois do cops start at $113K a year? Please, tell me, because I would very much like to know.
Comment by Rich Miller Wednesday, Oct 5, 11 @ 3:23 pm
–Again, with all these corporate deals, would it be cheaper to just cur our corporate tax rates?–
They think that will make them stop asking for more deals? Texas shells out tens of millions on “deal closers” every year and they don’t have an income tax.
Comment by wordslinger Wednesday, Oct 5, 11 @ 3:27 pm
wordslinger is correct. We could have a negative income tax and some corporations would still ask for more. Don’t kid yourself.
However, there is a tipping point level, and I think the biz income tax was raised so high that it’s made us far too uncompetitive.
Comment by Rich Miller Wednesday, Oct 5, 11 @ 3:33 pm
DD, as Rich has pointed out many times before, there’s been screaming in this state about underfunded pensions since at least the 1950s. I don’t think you can make a connection between state pension fund balances and liabilities and the lousy economy in the Western World, of which we are just a part of.
Comment by wordslinger Wednesday, Oct 5, 11 @ 3:42 pm
Just to clear, DD, those pension fund issues have been there for decades in very good economic times and bad. Your taking one problem and transforming it into the cause of many bigger problems.
Comment by wordslinger Wednesday, Oct 5, 11 @ 3:45 pm
===Your taking one problem and transforming it into the cause of many bigger problems===
In fairness to Dan, so is the Civic Federation.
Comment by 47th Ward Wednesday, Oct 5, 11 @ 4:16 pm
Wordslinger,
Those would be windmill-powered trains, not trains servicing windmills.
;-{)>
Comment by Cincinnatus Wednesday, Oct 5, 11 @ 4:18 pm
“A deal to keep CME Group Inc. from bolting the state could be reached as early as the start of the legislature’s veto session this month, Gov. Pat Quinn said Wednesday.”
Nothing like these types of announcements to mess up a deal…
Comment by Cincinnatus Wednesday, Oct 5, 11 @ 4:19 pm
You know, the guys at the board who are crying poor might want to do something about the “We Are the 1%” sign. Right now, they are asking for tax increases:
http://gawker.com/5846927/b
old-chicago-traders-launch-the-co
unter-revolution
Comment by Lakeview Wednesday, Oct 5, 11 @ 4:46 pm
Plutocrat,
The local numbers may be quite a bit off.
You can’t directly translate fed tax statistics based on a progressive rate to IL tax statistics based on a flat rate. Plus the fed tax structure further skews it by the various credits, such as child and earned income, which has low earners paying a negative tax (refund in excess of contributions) at the fed level.
If you want to make your case, you have to work the IL numbers independent of the fed numbers …
Comment by Retired Non-Union Guy Wednesday, Oct 5, 11 @ 5:32 pm
Pluto,
Did find one study released in 2009 but it’s an apples and oranges thing. It only shows the percentage of household income going to taxes. What it does show is the rich (defined as $95K or higher) pay less of their income, percentage wise, in terms of all taxes than the poor or middle class do. It also shows if you just figure the income tax, the rich pay a slightly higher percentage than the poor and middle class do. But I don’t think you could say the rich are overtaxed in IL.
Here’s the link (see pg 48 for IL):
http://www.itepnet.org/whopays3.pdf
Comment by Retired Non-Union Guy Wednesday, Oct 5, 11 @ 5:53 pm
Plutocrat
I notice you haven’t revealed this fantasy land where cops are making 113k
Comment by Fed up Wednesday, Oct 5, 11 @ 6:11 pm
Plutocrat — I just checked indeed, and it turns out that the average receptionist in Illinois is paid $30,000. And hey — try raising a family on that, and get back to me.
Comment by soccermom Wednesday, Oct 5, 11 @ 6:18 pm
===where cops are making 113k ===
As rookies. Don’t forget that part.
Comment by Rich Miller Wednesday, Oct 5, 11 @ 6:38 pm
===*** UPDATE *** The Sun-Times reports that Mayor Emanuel’s agreement to cut the head tax in half was behind Ford’s decision to expand employment…===
So they are going to save about $112,000 per year total in head taxes” and that is what tilted the decision to add about, what, maybe $100,000,000 in payroll? That’s a pretty misleading story.
Comment by Been There Wednesday, Oct 5, 11 @ 10:42 pm
With all of the problems Sears has if they think moving their HQ is a good idea and something they want to deal with right now, I would say let them go.
Sears Canada
http://www.theglobeandmail.com/report-on-business/sears-must-tackle-identity-crisis-ceo-says-in-memo/article2192378/
Bear of the day
http://www.sacbee.com/2011/10/03/3956056/zacks-bull-and-bear-of-the-day.html
Let them go, the idea of Sears contemplating a move right now is the same as the GA deciding the biggest issue facing Illinois right now is right turn on red near schools.
Comment by OneMan Thursday, Oct 6, 11 @ 9:00 am
The biz income tax certainly takes a bite out of those who have to pay it. But as we all know, most of the big boys don’t have to pay.
Sears isnt’t complaining about the income tax. They just want another break.
CME and CBOE are another story. You have to wonder, if they had pitched their fits and made their threats back in the lame duck session, it’s very likely the tax increases would not have passed.
Makes you wonder why they didn’t do that. I guess when we see their deals, we’ll know.
http://mywebtimes.com/archives/ottawa/display.php?id=292788
Comment by wordslinger Thursday, Oct 6, 11 @ 11:01 am