Chicago’s future as a financial center is threatened by $800 million in new taxes that Democratic Mayor Brandon Johnson wants to impose – with business leaders “considering leaving the city.”
Derivatives companies including DRW, IMC, CME and CBoe represent just a portion of the Windy City’s $75 billion financial industry – but the liberal mayor’s bold tax plan could jeopardize the future of their centers in the heart of the Midwest.
Johnson introduced the “Better Chicago Agenda” on January 23 – his plan to tax “suburbs, airlines and the ultra-rich.”
He hoped the tax plan would generate $800 million in new revenue for the city.
Johnson pledged to win $98 million by “making major airlines pay for air pollution” in Chicago neighborhoods, $400 million by raising real estate transfer taxes on sales of high-end homes range and $100 million in “user fees on high-end businesses”. neighborhoods frequented by the wealthy, suburbanites, tourists and business travelers.
Chicago’s future as a financial center is under threat from $800 million in new taxes that Democratic Mayor Brandon Johnson wants to impose – as business leaders “reportedly consider leaving the city.”
Derivatives firms including DRW, IMC, CME and CBoe make up just a portion of the Windy City’s $75 billion financial sector – but the liberal mayor’s bold tax manifesto could jeopardize the future of their centers in the heart of the Midwest.
While running for mayor, Johnson said he would raise more than $20 million by reinstating the $4 per month “head tax” per employee on “large corporations” that make at least the half of their work in Chicago.
More importantly, for large companies, Johnson proposed making $100 million by taxing financial transactions at a rate of $1 or $2 for each “securities trading contract.”
Now, with a budget deficit of nearly half a billion dollars, many business corporations and wealthy CEOs are weighing the risks of remaining in the Windy City before Johnson’s tax plans are fully deployed.
According to BloombergClosed-door discussions between leaders and policymakers make it clear that businesses should consider leaving the city if crime remains a problem and the financial transactions tax is passed.
Ed Tilly, CEO of Cboe Global Markets Inc, told Bloomberg: “We don’t want to leave, but we can’t be in a position where we’re at a disadvantage in the most competitive markets in the world, where our competitors don’t. not. » face the same economic situation as us.
The companies that end up fleeing Chicago would not be the first. Many lucrative businesses have moved to Texas and Florida in recent years — and notably, New York and California each lost companies that managed about $1 trillion in assets.
Johnson’s troubling tax plans, coupled with skyrocketing crime rates in Chicago, have created a dire situation.
Overall crime in Chicago increased 54% in 2023 compared to 2019, and is still 30% worse than this time last year.
So far in 2023, there have been 435 murders, 7,039 recorded robberies and 14,470 cases of theft.
In June 2022, it was announced that Illinois’ richest man was leaving the state and taking his billion-dollar roofing company with him to Florida, amid rising crime in the Windy City.
Ken Griffin announced that he and his family are moving to Miami, Florida – and said the headquarters of his hedge fund Citadel and trading firm Citadel Securities will move with him.
Citadel headquarters move (pictured) dealt blow to Chicago’s reputation
In a memo to employees, Ken Griffin announced that he and his family were moving to Miami, Florida, and that the headquarters of his hedge fund Citadel and his trading firm Citadel Securities would 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 requested to relocate to Miami, New York and other offices around the world. »
He then called 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 he was considering leaving the Windy City, saying the crime problem made it difficult to attract talent.
Griffin didn’t mention the city’s spiraling crime rate in his memo, but top executives say it’s likely one of the main reasons he decided to move the company, while noting that the Florida has no income tax, which would allow Griffin to expand his business. wealth even more.