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Adam Jabari Jefferson/MEDILL

Shani Smith, a CME shareholder, led protesters toward the CME Group headquarters.  Smith presided over the "People's Shareholders Meeting" rally earlier that day.

To CME chairman, $85 million tax break is fair.

by A. Jabari Jefferson
May 29, 2012


Adam Jabari Jefferson/MEDILL

The CME Group Chairman Terrence Duffy said an "outdated assumption" on their Illinois-based transactions justifies an $85 million tax break granted by Illinois lawmakers.


Adam Jabari Jefferson/MEDILL

Meanwhile,  budget cuts led to statewide layoffs in homeless services, prisons and mental health clinics.

What could the state of Illinois do with $85 million?

In Chicago, that money could have kept six public mental health clinics open. It could have improved 17 Chicago public schools. A small fraction of that could employ 24 people in the Division of Family and Support Services to aid homeless shelters.

Last year, executives from the CME Group, parent to the Chicago Board of Trade and the Chicago Mercantile Exchange, effectively lobbied ⎯ by threatening to relocate to Texas ⎯ to save $85 million in taxes.

“There’s a perception that we got a tax break,” CME Chairman Terrence Duffy said at the CME shareholders meeting last week. “That’s not true.”
He said, “We were being taxed on an outdated assumption that all our business was done in Illinois.”

Shareholder Shani Smith was among 50 activists removed from that same meeting for objecting the to the CME’s financial windfall. “They stand to gain a billion dollars over the next 10 years of taxpayers’ money coming out of our state budget,” Smith said.

The CME Group is taxed on only 27.5 percent of its electronic trades as a result of an emergency session the legislature held last December. The ratified tax relief package saved the CME $85 million annually.

According to Paul Buchheit, professor of economic inequality at DePaul University, the CME earns the highest profit margin of any large corporation in the U.S. “They are responsible for a quadrillion dollars of trade every year,” Buchheit said. That’s one thousand million million ⎯ one and 15 zeros.

“We don’t get any loopholes,” Smith said. “We’re working families. We’re veterans. We’re parents. We’re just asking them to pay their fair share.”