June 11, 2011

So …

Filed under: General,Taxes & Government — Tom @ 9:34 pm

predictable (links to all stories are at the just-identified Drudge Archive link):


Attn. John Kasich: CME Is Considering Leaving Illinois; Go After ‘Em (See Updates)

Filed under: Economy,Taxes & Government — Tom @ 11:01 am

cmeGroupLogoThe guys at Weapons of Mass Discussion reminded me of this development during last night’s radio show. It should be seen as a significant business opportunity for Ohio.

It’s described in a Friday evening Investors Business Daily editorial, with IBD’s characteristic caustic critique of Illinois’ default position that raising taxes is the answer to its serious fiscal problems:

Will The Chicago Merc Flee Illinois Taxes?

The company that owns Chicago’s two largest futures exchanges is thinking about moving operations out of state to flee oppressive business taxes. Worried about climate change? How about the business climate?

The days when Chicago was the “hog butcher to the world” have long since passed, replaced by its role as a leading financial trading center that is home to the Chicago Mercantile Exchange, also known as the Merc, and the Chicago Board of Trade.

On Wednesday, Terence Duffy, chairman of CME Group Inc., which owns the two institutions as well as the New York Mercantile Exchange, and Chief Financial Officer James Parisi announced the financial giant is considering moving operations and jobs out of the state in response to massive increases in state taxes.

Parisi told the company’s annual meeting of shareholders that the state legislature’s tax hike on corporations from 4.8% to 7% costs CME an extra $50 million a year. Corporations in Illinois also pay 2.5% tax on income, called a personal property replacement tax, which is collected by the state and flows to local governments.

The two rates taken together come to 9.5%, the third highest corporate tax rate in the nation, according to the Tax Foundation. In February, CME reported a 3% drop in fourth-quarter earnings partly because of expenses it booked related to the tax hike.

“I’m going to do what’s in the best interests of the shareholders,” Duffy said, adding that “if that means opportunities are greater elsewhere, then we’re going to look at those opportunities.” CME joins other Illinois companies such as Caterpillar and Sears Holdings who have talked about leaving town. …

In terms of Ohio, it’s a good news, potentially bad news situation:

  • The good news (I know, a little corny) is that CME wouldn’t have to change the logo seen at the top right if it moved to Cincinnati, Columbus, or Cleveland.
  • The somewhat bad news is that Ohio’s Commercial Activities Tax (CAT) and the named cities’ income taxes (Cincinnati, 2.1%; Columbus, recently raised to 2.5%; Cleveland, 2.0%) may be stumbling blocks.

The income taxes, if applicable to all CME income (if HQ’d in those cities, I believe they would be) would amount to about $34-$41 million.

It’s not clear to me whether the CAT would really apply to CME’s revenues (it’s hard to tell from the rules; would CME be seen as an exempt “financial institution”?). If it does, it looks like it would amount to about $7.8 million (0.26% on CME’s revenues of $3 billion), or about .5% of its income before income taxes. The CAT doesn’t hurt high-margin businesses such as CME anywhere near as badly as companies which operate on much thinner margins.

The sum of the two taxes would be in the neighborhood of the $42 – $50 million, which looks to be far less than the total CME is paying in Illinois (the $50 mil mentioned in the editorial is the increment due to the Illinois tax increase, not the total corporate income tax burden, which appears to be more like perhaps $150 million). Additionally, Illinois has been known for awfully high property taxes for a long time, so Ohio would probably also be a relatively good bargain on that front.

If it didn’t worry about what the “C” stands for, CME could solve the municipal income tax problem by locating in an income tax-free township.

Getting CME would be a business coup beyond the ordinary because of its high profile. Team Kasich needs to go after this one aggressively.


UPDATE: A possible fringe benefit — If CME moves, so might CNBCer/Tea Party hero (here and here) Rick Santelli. How cool would that be?

Maybe Santelli could find the time to do evening tutorials on how capitalism works at Progress Ohio.

UPDATE 2: Also worth noting, thanks to a tip on the topic from a reader, via Your Doubting Thomas at ChicagoNow.com

Pat Quinn doles out over $230 million in tax breaks to big business, putting more burden on individual Illinois taxpayers

Another Illinois company has threatened to leave to state because of Governor Quinn’s tax increase. Over the last six months, our state’s giant companies, including, Caterpillar, Sears Holdings, Motorola Mobility, and Navistar International, all threatened to leave the state because the corporate tax increase would cost the companies millions more to do business in Illinois.

This week sees the Chicago Mercantile Exchange and Chicago Board of Trade seeking to move their operations out of state to New Jersey, Indiana or another state in an effort to save an estimated $50 million in taxes a year.

Remember, in January, Illinois raised the corporate tax income from 4.8% to 7%. Illinois corporations also pay 2.5% in additional taxes in income called the personal property replacement tax. Taken together, the two rates are 9.5% which is the third highest rate on the United States.

As our state’s big businesses threatened to leave, Governor Quinn talks big, but ultimately backs down. Thru May 2011, he has handed out an estimated $230 million in tax breaks, called “financial incentive packages” to these big businesses.

So Quinn is having to engage in massive levels of what should correctly be seen as corporate welfare just to keep large companies — supposedly the progressives’ villains — in the state. More crony capitalism. It’s getting old. Gosh, wouldn’t it be easier to have a reasonable level of taxation for everyone?

Positivity: Strong faith, prayer help in young girl’s cancer recovery

Filed under: Positivity — Tom @ 9:19 am

From Greenville, Rhode Island (HT Catholic News Agency):

June 9, 2011 / 01:57 pm

With quiet confidence Sydney Khoury climbs each step of a metal ladder as she positions herself to place a crown of flowers atop a statue of the Blessed Mother at St. Philip Church in Greenville, R.I.

It’s a bit of a reach for Sydney, but with determination, the nine-year-old extends her arms, carefully placing her tribute atop the head of the Mother of Jesus.

A short distance away, Bishop Thomas J. Tobin of Providence, R.I. watches admiringly as the St. Philip School second-grader successfully overcomes yet another obstacle in her young life. Three years ago, Bishop Tobin also witnessed Sydney overcome one her greatest challenges. At that time, as she lay in the Intensive Care Unit of Hasbro Children’s Hospital with her life hanging in the balance, the bishop prayed over her with a relic of Mother Teresa.

Sydney’s parents say the prayerful intervention yielded results nothing short of miraculous.

In November 2007, Sydney was diagnosed with a Stage 3 malignant tumor on her kidney. Two days later, doctors removed her kidney and started her on a treatment regimen of chemotherapy and radiation. The overall success rate of the treatment was only 42 percent they were told.

For nearly three months, her condition was stable. Then, a robust round of chemotherapy quickly took its toll on her.

“She started five days of chemo. It hit her so hard,” recalls her mother, Michele.

Sydney went into what is known as a neutropenic state, as her white blood cell count dropped to zero, severely limiting her body’s ability to fight off infections.

“She was home for three days; on the fourth, she caught a fever,” Michele said.

Sydney was immediately brought into the hospital where she spent nearly all of February 2008 in the Intensive Care Unit.

She was intubated twice to maintain an open airway, and also became paralyzed for 12 hours during that time.

On Feb. 20, Michele and Ken Khoury received news that no parent ever wants to hear.

“They couldn’t tell me if she’d make it,” Michele said. “The doctor said, ‘I can’t guarantee anything over the next 48 hours’.”

Two days later, Sydney received the sacrament of the anointing of the sick from Father Peter J. Sheahan, the assistant pastor at St. Philip Church.

On Feb. 27, with Sydney’s condition not improving, doctors performed a lung biopsy.

“Her lungs were just collapsing,” her mother recalls.

The next day, with doctors about to have a discussion with the family about their wish to fit Sydney with a tracheal tube to help her breathing, Bishop Tobin visited Sydney in the hospital.

As he prayed over her, he held in his hand a relic of Blessed Mother Teresa. It was a gift from a priest friend back in his native Pittsburgh who had obtained it in Rome where he worked with the Missionaries of Charity, the religious order founded by Blessed Mother Teresa.

What happened next was remarkable.

Both of Sydney’s parents and Bishop Tobin witnessed the young girl’s body convulse during the prayers for her recovery.

“Very quickly after that, she got well,” Michele said of her daughter’s health. “He did the blessing and she didn’t need the tracheotomy.”

While he is cautious about attributing Sydney’s recovery solely to divine intervention, Bishop Tobin says the day he visited her in the hospital was a powerful day indeed.

“I always tend to be skeptical of these divine interventions, but it is very clear to me that something very special happened that day,” Bishop Tobin said.

“When she was blessed with the relic, her body reacted and she opened her eyes,” the bishop recalls.

In order to ensure any possible recurrence of cancer is treated immediately, Sydney must undergo an MRI every three months. Her most recent test showed that she is still in remission.

“Her spirits are great,” Sydney’s dad, Ken, said of his daughter.

In addition to the unwavering support of family and friends throughout, the Khourys say they cannot thank the St. Philip school and parish community enough for helping the family navigate through their crisis, as well as the continual support they give.

“Our family and friends had one of Sydney’s hands, and the school and the church had the other,” Michele said.

“The way they got involved, it was like they were doing it for their own families,” Ken said of the St. Philip community.

Students and teachers held a 24-hour vigil for Sydney.

“It brought the whole community so close,” said kindergarten teacher Diane Ahern. “She’s a gift from God.” …

Go here for the rest of the story.