Chicago‘s future as a finance hub is being threatened by $800million in new taxes that Democrat Mayor Brandon Johnson wants to impose – as business leaders are allegedly ‘considering quitting the city.’
Derivative firms, including DRW, IMC, CME and CBoe, account for just some of the $75 billion finance industry in the Windy City – but the liberal mayor’s audacious tax manifesto may jeopardize the future of their hubs in the heart of the Midwest.
Before he was elected, Johnson introduced ‘Better Chicago Agenda’ on January 23 – which was his plan to tax ‘the suburbs, airlines and ultra-rich.’
He expected this tax plan to generate $800million in new revenue for the city.
He pledged to make $98 million from ‘making the big airlines pay for polluting the air’ in Chicago neighborhoods, $400 million from raising the real estate transfer tax on high-end home sales, and $100 million from ‘user fees on high-end commercial districts frequented by the wealthy, suburbanites, tourists and business travelers.’
Chicago ‘s future as a finance hub is being threatened by $800million in new taxes that Democrat Mayor Brandon Johnson wants to impose – as business leaders are allegedly ‘considering quitting the city’
Derivative firms, including DRW, IMC, CME and CBoe, account for just some of the $75 billion finance industry in the Windy City – but the liberal mayor’s audacious tax manifesto may jeopardize the future of their hubs in the heart of the Midwest
Johnson, while running for mayor, said he’d levy over $20 million from reinstating the $4-a-month-per-employee ‘head tax’ on ‘large companies’ that perform at least half their work in Chicago.
Most significantly for big businesses, Johnson proposed making $100 million from taxing financial transactions at a rate of $1 or $2 for every ‘securities trading contract.’
Now, with a budget gap of nearly half a billion dollars, many trading companies and wealthy CEOs are assessing the risks of staying in the Windy City before Johnson’s tax plans roll out in full force.
According to Bloomberg, conservations behind closed doors between executives and policymakers are making clear that firms are to consider leaving the city if crime remains an issue and the financial transaction tax passes.
Ed Tilly, the chief executive officer of Cboe Global Markets Inc, told Bloomberg: ‘We don’t want to leave but we cannot be in a position where we are disadvantaged in the most competitive markets in the world, where our competitors don’t face the same economics that we would.’
Companies that end up fleeing Chicago would not be the first. Many lucrative businesses have moved to Texas and Florida in recent years – and namely, New York and California have each lost firms that managed around $1trillion in assets.
Johnson’s concerning tax plans, coupled with the soaring crime rates in Chicago, have made for a sorry situation.
Overall crime in Chicago is 54 percent up in 2023 compared to in 2019, and is still 30 percent worse than this time last year.
So far in 2023, there have been 435 murders, 7039 recorded robberies, and 14,470 instances of theft.
In June 2022, it was announced that Illinois‘ richest man was leaving the state and taking his billion-dollar hedge firm with him to Florida amid rising crime in the Windy City.
Ken Griffin announced he and his family are relocating to Miami, Florida – and said the headquarters of his Citadel hedge fund and his trading firm Citadel Securities will move with him
The move of Citadel’s headquarters (pictured) caused a blow to the reputation of Chicago
In a memo to employees, Ken Griffin announced he and his family are relocating to Miami, Florida – and said the headquarters of his Citadel hedge fund and his trading firm Citadel Securities will move with him.
‘Chicago will continue to be important to the future of the Citadel, as many of our colleagues have deep ties to Illinois,’ he wrote in the memo, according to the Chicago Sun-Times.
‘Over the past year, however, many of our Chicago teams have asked to relocate to Miami, New York and other offices around the world.’
He went on to call Chicago a ‘remarkable home’ for Citadel, and praised past support from political and business leaders.
But in the past, Griffin has spoken out against Chicago’s growing crime problem.
He even suggested that he was considering leaving the Windy City, saying the crime problem is making it difficult to attract talent.
Griffin did not mention the city’s spiraling crime in his memo, but top executives say it is likely a major reason he decided to move the company, though they also note that Florida does not have a state income tax, which would allow Griffin to grow his wealth even more.
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