Illinois State Rep. Mary Flowers (D-31st) Saturday urged the governor to support her legislation calling for the passage of the â€œLaSalle Street Taxâ€ she said would yield between $10 to $12 billion a year for Illinois.
In support of Flowersâ€™ bill (HB 106) is the National Nurses Organizing Committee, which put out a flyer explaining how the LaSalle Street Tax could wipe out Illinoisâ€™ budget deficit.
The LaSalle Street Tax, known also as the Financial Transactions Tax (FTT), is a very small tax on the trading (buying and selling) of financial assets such as stocks, bonds, currencies and derivatives (futures and options) based on these assets., explained Flowers who appeared at a Rainbow PUSH Coalition meeting.
Flowers , who also talked to this reporter, said the bottom line is that it is like a sales tax much like the purchases consumers make every day. Flowers likened LaSalle Street (a trading district) to Wall Street.
With Illinois treading in a deep deficit, Flowers said making Illinois fiscally solvent rest in Chicagoâ€™s two largest financial markets in the worldâ€”the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE). Flowers said the products traded on the floors of these two exchanges reportedly equal more than $500 trillion.
Rep. Flowerâ€™s bill proposes a $1 contract fee on all agricultural futures and options traded on these two exchanges and a $2 contract fee on all other futures, futures options and options traded on these two exchanges.
Explaining, she said the average contract size at these exchanges amount to more than $225,000 or less than 2/1000 of a percent of average contract value.
The tax is on the buyers and sellers of futures and options contracts that are traded in the exchanges. â€œThe exchanges would simply act like the hardware store that collects the sales tax when you buy a product and then sends the tax to the State of Illinois,â€ explained Flowers.
She argued that there is precedent for using this tax to balance budgets pointing to the United Kingdom, Switzerland, Hong Kong, Australia, France and Singapore with 11 European countries set to implement an FTT in 2015.Â Flowers said this tax has not hurt those large markets that have been in place for years.
Flowers said passing this tax would not bring financial harm to those involved in the two exchanges because the traders are large banks, hedge funds, financial institutions and wealthy people but the bottom line is this tax can erase Illinoisâ€™ burgeoning budget deficit.
â€œI urge all of you to call Gov. Bruce Rauner at his Springfield office at 217.782.0244 and/or his Chicago office at 312.814.2121 and tell him to support my bill, HB 106, which calls for the CME and the CBOE to pay their transaction tax which would generate up to $12 billion a year,â€ said Flowers. Â â€œThat would be more than enough to erase our huge deficit.â€
Rep. Flowersâ€™ bill is in the Rules Committee.
Chinta Strausberg is a Journalist of more than 33-years, a former political reporter and a current PCC Network talk show host. You can e-mail Strausberg at: Chintabernie@aol.com.