The Illinois legislature has apparently reached an agreement on the CME/CBOE/Sears tax breaks, the Tribune reports. The Illinois House Revenue Committee endorsed a new package this morning, which is expected to move to the House floor this afternoon.
The breaks in the package will cost an estimated $218 million per year, and with the breaks for individual workers included, could jump up to $350 million, Rep. John Bradley (D-Marion) said. Sears will receive tax credits worth $15 million annually for the next decade as well as a break on property taxes for the next 15 years, which would save them $125 million. The tax code for financial exchanges will be revised so that only 27.54 percent of electronic trades will be taxable, giving an estimated $85 million to CME and CBOE. The deal also includes $3.5 million in breaks to downstate company Champion Laboratories, Inc.
The deal also includes an increase in the earned income tax credit for low and middle income workers and families as well as a raise of $50 in the personal tax exemption on state income taxes.
If the deal passes, it will be a victory for big business in Illinois, who have been essentially holding the state hostage by threatening to move out of state unless they receive big tax breaks. Business Week reports Illinois Chamber of Commerce president Doug Whitley said "In January, the Illinois General Assembly overreached and sent a message of anti-business signals. This is a positive message that says, 'We hear you.'" Positive indeed, for any business wishing to demand a state billions of dollars in the hole give them a tax break. As Kent Redfield, a political scientist at University of Illinois points out, "…it opens the door to the next business and the next business and the next business. It makes good political sense but it's not sound financial policy."
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