So funny it hurts | On Politics | Chicago Reader

So funny it hurts 

State tax break for the Merc is more laughable with each passing day

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Even worse, lawmakers I spoke with said they didn't get any detailed information, either.

So I then called the smartest CPA I know, an old friend I'll call Birdie.

He wound up telling me more than I'd ever want to know about Generally Acceptable Accounting Principals (aka, GAAP). The bottom line being that there's no one way of knowing exactly how much CME paid in Illinois income taxes based on that SEC statement.

"I'd say that sending you the 10-k was that guy's way of giving you the middle finger," Birdie said.

No—not my new best friend Michael Shore!

In short, the tax break stemmed from an unverifiable claim made by Terry Duffy in interview with Bloomberg. How's that for reassuring?

Call it take-my-word-for-it accountability. To give it some perspective, imagine if you went to the state and said, "I can't afford to pay this year's college tuition for my son, so just give him a free ride." And the state said, "Sure, why not? We'll take your word for it!"

On December 16, Governor Quinn signed it into law.

Then, as I mentioned, Mayor Emanuel added his two cents.

I'm not even sure why the mayor felt compelled to weigh in, unless it's to remind his friends at CME that he too had a hand in getting them the big tax break—so don't forget him at campaign contribution time.

Oh, wait—I just figured it out. Smart guy, that mayor of ours.

Back to his statement: "This tax reform legislation will protect thousands of jobs in Chicago and keep the CME Group where it belongs, here in the city."

Here's the thing—as pretty much everyone in the options business knows, the industry is cutting jobs—not adding them—as it moves away from floor to electronic trading.

At last count, CME employed 1,750 people in Chicago. I know this because that's how many jobs the company said it had here in 2010, when the city offered CME $15 million in TIF funds to keep those jobs in town—as opposed to moving them to Elkhart.

By the way, CME didn't sign that TIF deal, as generous as it may have seemed, probably because it required them to stay in town and keep those 1,750 employees on the payroll. And if the company had agreed to that, it would have lost the move-to-Indiana threat used to strongarm the state into handing over hundreds of millions of dollars in tax breaks.

You don't have to be a brilliant CME trader to know that hundreds of millions of dollars with no strings attached is a better deal than $15 million with strings attached.

So you might say that the city's CME TIF deal was better than the state's CME tax break.

And people claim I never say anything nice about TIFs . . .

By the way, I don't blame CME for playing hardball. They're not in business to help pay for stuff like public education. They're in business to make money, and if they can make more money by pruning their payroll and lowering their tax bill, that's what they're going to do.

On the other hand, Governor Quinn, speaker Madigan, senate president Cullerton, and Mayor Emanuel are supposed to be guardians of the public purse. Ha ha ha . . .

All right, fellas—I'll give you a way to undo the damage you've done. Slap a tax on all transactions made or brokered through CME and use the money to pay for the schools.

If they don't like it, too bad. Let them move to London like AON, speaking of local companies who are looking out for number one. Another story for another day.

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