financial transaction tax – Chicago Newstips by Community Media Workshop http://www.newstips.org Chicago Community Stories Mon, 08 Jan 2018 18:45:05 +0000 en-US hourly 1 https://wordpress.org/?v=4.4.14 ‘Durbinville’ dramatizes safety net cuts http://www.newstips.org/2012/12/durbinville-dramatizes-safety-net-cuts/ http://www.newstips.org/2012/12/durbinville-dramatizes-safety-net-cuts/#comments Thu, 06 Dec 2012 02:09:39 +0000 http://www.newstips.org/?p=6822 Local protestors will erect a “Durbinville” shantytown at the Federal Plaza at noon on Thursday, continuing their challenge to Senator Richard Durbin’s embrace of the austerity agenda that’s dominating budget talks in Washington.

Since Monday, a coalition of grassroots groups has been staging a soupline outside Durbin’s downtown office “to make visible the hunger and suffering that budget cuts will create,” according to a statement from IIRON.

All kinds of people are accepting the homemade soup being offered, and many are expressing surprise when they learn that Durbin is backing drastic safety net cuts, said Kristi Sanford of Northside POWER.

The long-term spending reductions Durbin is calling for — outlined in the Simpson-Bowles commission report he backed in 2010 – would be no better than the cuts required by “sequestration” if Congress fails to come up with a budget deal by the end of the year, Sanford said.

“They would push us back into recession, and we’d have more lost jobs and suffering,” she said.  “It would cut education, food security, a whole range of government services we rely on.”

At a recent speech at the Center for American Progress in Washington, Durbin cited the “fiscal conservatism” of his liberal predecessors, Paul Douglas and Paul Simon, to justify his stance.

According to Sanford, in a series of meetings with coalition members this year, Durbin refused to back off his call for cuts to Social Security.  But last month, after 19 protestors were arrested at his office, he seemed to relent slightly, saying Social Security cuts shouldn’t be part of a deal this year.

He’s still calling for deep cuts to Medicare and Medicaid, Sanford said, and he wants a commission to consider Social Security cuts next year.

The Simpson-Bowles report backed by Durbin called for reducing Social Security cost-of-living increases and raising the retirement age to 69.  It relies on a formula that assumes seniors would substitute cheaper alternatives as prices for necessities rise — thus earning Simpson-Bowles the nickname of “the catfood commission.”

Raising the retirement age would penalize low-income workers, whose life expectancy has not been rising, Sanford said.  (She suggested reading Paul Krugman’s analysis of this issue.)

If the federal government would restore pre-Bush era tax rates on the wealthy and institute a financial transaction tax – a small fee on sales of stocks and bonds, now being implemented in France and Germany, that could raise as much as $1.8 trillion over a decade – it could maintain the safety net and pay down the deficit, Sanford said.

At one meeting with the coalition, Durbin said he couldn’t back a financial transaction tax because it would impact the Chicago Mercantile Exchange, said Toby Chow of Southsiders Organized for Unity and Liberation.  CME is one of Durbin’s largest contributors, Sanford said.

Durbin has also failed to endorse legislation that would raise the income cap on payroll taxes and eliminate long-term shortfalls for Social Security. (President Obama backed this approach prior to his election.)

The shantytown and souplines are an effort to encourage Durbin to “look into the eyes of the people his budget decisions will affect, and remember that CEOs and Wall Street donors are not the only people with huge interests at stake in the budget negotiations,” Sanford said.

Organizers expect hundreds of protestors Thursday (December 6, 12 noon, Dearborn and Adams).   The coalition sponsoring the action includes Make Wall Street Pay/Illinois, IIRON, SOUL, Lakeview Action Coalition, Northside POWER, and Illinois Peoples Action.

 

An error regarding the date of the Simpson-Bowles report has been corrected.

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North Side voters back financial tax http://www.newstips.org/2012/03/north-side-voters-back-financial-tax/ Wed, 21 Mar 2012 22:04:43 +0000 http://www.newstips.org/?p=6024 By a wide margin, North Side residents backed a referendum calling for a sales tax on financial transactions Tuesday.

Voters in 17 precincts in the 46th Ward voted 3-to-1 in favor of “policies to tax speculative financial transactions including, but not limited to, derivatives and futures contracts.”

A one dollar per contract sales tax on trades on the Chicago Mercantile Exchange, which have an average value of $230,000, could generate $6 billion dollars a year for the state or city, according to Northside Action for Justice, which backed the referendum.

The group sponsored the referendum because “politicians have not been taking this seriously,” said Kelate Gaim of Northside Action in a release.

“Why do I pay more sales tax when I buy a pair of shoes than these traders do placing speculative bets?” asked Francis Tobin, the group’s chair. The financial transaction tax would be borne by individual traders, not by exchanges.

By a similar margin, voters in those precincts also backed a TIF reform proposal calling for returning surpluses to schools and other taxing bodies, and restricting future TIF spending to affordable housing, living wage jobs and businesses, and youth and senior services.

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Occupy Austin, Occupy Bronzeville http://www.newstips.org/2011/10/occupy-austin-occupy-bronzeville/ Fri, 28 Oct 2011 21:51:06 +0000 http://www.newstips.org/?p=4873 Occupy Austin and Occupy Bronzeville, joined by people from Occupy Chicago, will begin a new drive to occupy foreclosures at actions on the West and South Sides tomorrow.

They’ll rally with tenants of a foreclosed building who are resisting what they say are illegal attempts to evict them from a 12-unit rental building, just two weeks after foreclosure.

Federal law requires tenants be given at least 90 days to move.  (See the recent Newstips post, Foreclosure and tenants: Banks break the law.)

“We’re saying these folks will not be moved,” said Elce Redmond of South Austin Coalition.  He said Occupy Austin would continue “organizing people on a day-to-day basis against the big banks.”  Their goal is “nonviolent mass organization to fight the greed and corruption of the top 1 percent and restore democracy in America.”

Redmond said the Lawyers Committee for Better Housing is representing the tenants in a lawsuit.

The rally starts at 11 a.m. on Saturday, October 29, at 5960 W. North.

From there the groups will head to a housing resource fair at IIT’s Herman Hall, 3241 S. Federal where they’ll talk with homeowners seeking mortgage modifications.

“We want to see how many homeowners get modifications,” said Willie J. R. Fleming of the Chicago Anti-Eviction Campaign, a core group in Occupy Bronzeville, which is part of a nationwide Occupy the Hood movement.

“There are a lot of resource fairs going on since the collapse of the financial system, but we still have millions of people losing their homes,” Fleming said. “We want to see if this is a real solution or just a dog and pony show.”

They’re laying plans to occupy foreclosed homes as well as blighted commercial spaces, which they want to turn into community centers, he said.  (This is a tactic that’s worked in Boston, Mark Konzcal writes at New Deal 2.0.)

Meanwhile Occupy Chicago is regrouping – and exploring options to lease indoor space — since the city turned down the group’s request for a permanent location on Thursday, spokesperson Sugar Russell said.

They could use a space for teach-ins and trainings, as well as a place to warm up, she said.

But she notes that their current location at LaSalle and Jackson – in front of Bank of America, across the street from the Federal Reserve – is not without its significance.

That’s especially true since last week, when anonymous regulators leaked to Bloomberg that the Fed was okaying BOFA’s shift of trillions of dollars worth of derivatives from its Merrill Lynch unit to a subsidiary that’s insured by the FDIC – over the FDIC’s objections.

The FDIC’s deposit insurance fund finally turned positive in June, now amounting to just $3.9 billion.  A failure by troubled BOFA, which no one seems to be discounting, would require the FDIC to go to Congress for a bailout, possibly several times the size of TARP.

As Robert Reich argues, the situation shows the wisdom of the Glass-Steagall Act, which (until the year 2000) kept investment banks seperate from government-insured commercial banks – and underscores the need to break up “too big to fail” banks.

MSNBC senior editor James Carney calls it “outrageous” that BOFA is “obviously exploiting government backing for profit.”  Bloomberg’s Jonathan Weil says it reinforces the popular impression that the Fed “puts big banks’ interests above those of ordinary taxpayers.”

More from Yves Smith, William K. Black, and most bleakly, Christopher Whalen.  Locally only ENews Park Forest seems to have noted the story.

And more attention is coming.  On Monday, National Peoples Action and the New Bottom Line Campaign will launch an online campaign to press BOFA to stop financing payday loans.

“Big banks like BOFA borrow money from the Fed at less than 1 percent interest, then lend that to payday lenders at 3 percent, who then turn around and lend money in our communities at 400 percent or more,” according to a note from NPA.

Elsewhere, the anti-corporate Adbusters magazine, which initiated the call to occupy Wall Street in September, is urging a global day of action Saturday in support of the “Robin Hood tax,” which is what they’ve dubbed the financial transaction tax.  That idea has gotten some attention in Chicago locally, with a modest proposal from Stand Up Chicago and the Chicago Political Economy Group (see previous post), but it’s a very live issue for the G20 Summit that convenes in Cannes on November 3.

There it’s backed by the governments of France and Germany as well as the European Union, which recently moved to adopt a continent-wide tax on speculation.  It’s being blocked by the Obama administration.

“Let’s send them a clear message: We want you to slow down some of that $1.3 trillion easy money that’s sloshing around the global casino each day — enough cash to fund every social program and environmental initiative in the world,” Adbusters writes.

“It’s obvious you have no idea how to get us out of this economic mess you put us in,” the magazine tells the elite. “So now we are telling you what we want: a radical transformation of casino capitalism.”

The tax would not only raise as much as $400 billion a year and offset the effects of the global crisis, which has thrown 60 million people into poverty worldwide, according to Oxfam America; it would target the spit-second computer-generated speculation that leaves the world’s economy so unstable.

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Alternatives to cuts http://www.newstips.org/2011/10/alternatives-to-cuts/ http://www.newstips.org/2011/10/alternatives-to-cuts/#comments Tue, 11 Oct 2011 21:49:57 +0000 http://www.newstips.org/?p=4806 With Mayor Emanuel’s budget proposal expected to emphasize austerity with heavy cuts to city services, proposals to bolster revenues — and ensure that sacrifice is truly shared — are gaining traction.

“We’re afraid [the budget] is going to be heavy, heavy, heavy on cuts” including public safety and other city services, with the main impact “on working families and public sector workers,” said Amisha Patel of the Grassroots Collaborative, which is holding a “corporate welfare tour” Wednesday morning (see below).

The group’s initiative to return hundreds of millions of TIF funds to the city and other taxing bodies has the most momentum right now.  Seventeen aldermen cosponsored the Responsible Budget Ordinance – which would return 50 percent of surplus TIF dollars from all TIFs with balances over $5 million – and more have signed on since it was introduced last week.

Though the city hasn’t provided current figures, the measure could provide as much as $500 million to the city, schools, and other agencies, Patel said.  The bulk of the surplus is in 16 downtown TIFs, where subsidies have gone to highly profitable corporations, she said.

‘High-rent’ areas

Those are the “high-rent” areas where Emanuel said TIFs are inappropriate during his campaign.  His TIF reform panel, however, recommended criteria that would allow them to remain in place.  (It also recommended reviewing TIFs with the option of declaring a surplus.)

Emanuel has opposed using TIF surpluses, but he may be “coming around,” the Sun Times notes in an editorial backing the measure.

He should.  The reason he’s given – he’s against “one-time budget fixes” – doesn’t really apply.

It resonated with voters who’ve seen parking meter and Skyway privatization funds squandered.  But TIF accumulations are a different animal – taxpayer money sitting unused in a mayoral slush fund, to be handed out to politically favored developers and corporations.

Declaring a surplus would be sweeping the slate clean, a first step toward reform – and the TIFs will go on to accumulate new funds, taking in $500 million every year.

It’s a smart response to the recession, which is a big reason city revenues are down.  Freeing up the funds would also act as a stimulus to the city’s economy; heavy job cuts will add to the downward spiral of unemployment, foreclosures, disinvestment and destabilization.

Grassroots Collaborative will hold a press conference with supporters of the Responsible Budget Ordinance at City Hall on Wednesday morning (October 12, 9 a.m.) followed by a trolley tour of downtown corporations that have gotten TIF subsidies, including the Chicago Board of Trade, Miller Coors, the Willis Tower, and United Airlines.

Taxing traders

The campaign for a financial transaction tax got renewed impetus last week with a specific proposal from Stand Up Chicago and the Chicago Political Economy Group spelling out just how it would work here.

It would cover contracts sold on the Chicago Mercantile Exchange and Chicago Options Exchange, though the exchanges wouldn’t pay the fee.  Buyers and sellers would pay 25 cents per contract – a trivial amount on an average contract of $233,000, but with 12 million contracts a day, it would add up to $1.4 billion a year.

As we noted Friday, Bill Gates and, at one point, President Obama are among many prominent supporters of the concept; the New York Times just urged consideration of a national transaction fee.  In Chicago, 25 aldermen backed a related proposal last year.

Since Emanuel is a former CME board member, this could be his “Nixon goes to China” moment.  If not, it’s likely that support for the measure will grow, as discontent over corporate profiteering rises.

Commuters

Meanwhile there’s another huge pot of money that goes untouched.  As Inspector General Joe Ferguson noted in his report on budget options, there are 620,000 commuters earning a living in Chicago but paying their taxes elsewhere.  He estimates their earnings at $30 billion a year, based on the area median, but it’s likely much more, since they include many of the highest earners, economists say.

In a study done years ago, UIC economist Joseph Persky says he found that more than half of all earnings in the city went to suburban residents.  “I don’t see any reason that would have changed,” he said.

Indeed, the imbalance could well have increased – particularly because downtown development spurred by TIF seems to have benefited suburbanites far more than city residents, as the Chicago Reporter revealed earlier this year.

According to data supplied by the Reporter (thanks to Angela Caputo), residents of the collar counties held 23,824 more Loop jobs in 2008 than in 2002, while Chicago residents lost 21,057 Loop jobs in the same period.  (Suburban Cook residents lost about 1,900 Loop jobs.)

Nonresidents making a living in Chicago take advantage of all the city’s services and infrastructure; they just don’t pay for it.

One possibility for capturing a portion of that wealth is a commuter tax – an income tax on nonresidents working in the city.  Philadelphia and other cities have one, and New York City had one for two decades, before the state legislature abolished it in a bid for suburban votes.  (Mayor Michael Bloomburg has been pressing for its reinstatement.)

Ferguson estimates a 1 percent tax would generate at least $300 million; it could well be much more.  Several City Council members have spoken favorably of the idea, but politically it’s a tough climb, requiring approval from the state legislature.

Congestion pricing – a charge on vehicles entering the central district during business hours — would capture some of the revenue now being lost from out-of-towners, suggests Ron Baiman of CPEG.  The City Council could enact it.

The Center for Neighborhood Technology supports such a charge, said Maria Choca-Urban, the group’s director for transportation.   It would reduce congestion and auto emissions, she said – but revenue should be used to improve public transportation.  “If you’re going to put in place a deterrent to driving, you have to improve the alternatives,” she said.

With the CTA facing billions in unmet capital needs – and major portions of the city (notably the Far South Side) still unserved by rapid transit – there’s plenty of room for improvement, and those investments would mean badly-needed jobs.

[The Active Transportation Alliance points out that CTA service cuts and fare increases are expected in the forthcoming budget.  “Unfortunately, the threat of fare increases and service cuts have become an annual tradition in our region because our elected leaders have failed to adequately fund transit,” the group comments. “The consequences of service cuts and fare increases would be far-reaching, impacting our mobility, our economy, our quality of life, our environment and the congestion on our streets.”]

Ferguson envisions a complex collection system requiring electronic tolling sensors on every street leading downtown and transponders in every car.

London has a somewhat simpler system; commuters buy permits at shops, and a system of cameras identifies vehicles entering without paying.  Buses, cabs, and delivery vehicles are exempted, and residents of the central area can get a 90 percent discount on the charge.  In 2006, London’s congestion charge brought in nearly $400 million.

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This could be the start of something big http://www.newstips.org/2011/10/this-could-be-the-start-of-something-big/ http://www.newstips.org/2011/10/this-could-be-the-start-of-something-big/#comments Fri, 07 Oct 2011 19:57:14 +0000 http://www.newstips.org/?p=4789 New and old strands of youth, community, labor and peace organizing – voicing growing anger over the state of our economy and our democracy – will come together in a series of events here over the next week, with thousands expected for a major Columbus Day demonstration.

Holding their ground outside the Federal Reserve on LaSalle Street, Occupy Chicago – one of many ongoing actions inspired by Occupy Wall Street, which is now backed by the AFL-CIO – has brought new momentum and visibility to concerns that labor-community coalitions have been pressing since the 2008 bank bailout.

The Tribune reports that Occupy Chicago’s numbers are growing; In These Times has the inside story. We Are The 99 Percent offers the demonstrators’ own pointed and poignant tales.

On Friday, October 7, Stand Up Chicago and the Chicago Political Economy Group are releasing a report analyzing unemployment in Chicago and proposing a Chicago Community Jobs Fund to create 40,000 jobs (more below).

Also Friday, Chicago Jobs With Justice (which celebrates its 20th anniversary Tuesday) is holding its monthly unemployment report event, pointing out that of 100,000 jobs added last month, half were striking Verizon workers returning to their jobs.  “The private sector cannot create jobs in a weak economy with little demand,” said Susan Hurley.  “We can only create jobs with major federal investment.”

On Saturday, October 8, Occupy Chicago will join scores of groups protesting the tenth anniversary of the war in Afghanistan.  They’ll rally at noon at Michigan and Congress; speakers include Alejandro Villatoro of Iraq Veterans Against the War, who recently returned from a deployment in Afghanistan; Mary Dean of Voices for Creative Nonviolence, who spent a month in Afghanistan this summer; and former Chicago activist, Black Agenda Report editor Bruce Dixon.

They’ll march past Obama 2012 campaign headquarters at the Prudential Building, where they’ve held a two-day vigil, and end up joining Occupy Chicago at the Federal Reserve building at Jackson and LaSalle.

The cost of the war is now approaching $500 billion, by one calculation.

On Monday, thousands of Chicagoans – people “fed up with big bank greed and Wall Street corrupting our democracy” — will protest at two financial industry conventions and converge for a mass rally at the Art Institute, sponsored by the Take Back Chicago coalition.  Their goal:  “To begin taking back the jobs, homes, and schools stolen from us by the greed of big banks and big business.”

Local groups belonging to National Peoples Action will protest outside the annual conference of the Mortgage Bankers of America at the Hyatt Regency, Wacker and Stetson, at 4 p.m.  MBA includes the nation’s largest banks along with independent mortgage companies.

Protestors will demand that banks reduce principals on all underwater mortgages in order to stop foreclosures and spur the economy (see Newstips, Communities to Banks: You can fix housing crisis, economy).

Also at 4 on Monday, college students will protest at the Futures and Options Expo (which includes the Chicago Mercantile Exchange) at the Chicago Hilton at Balbo and Michigan.  “We’re going to the source – to the people who have hurt us in this recession,” said Haley Leibovitz, a Roosevelt University student active in Next Up Chicago, a network of young labor activists.

At the same time, the Chicago Teachers Union will rally at the Chicago Board of Trade, where $15 million of TIF money was spent on remodeling, and labor groups will rally for jobs at the Daley Plaza and the Federal Plaza – all marching to the Art Institute at 5 p.m., where the Futures Expo holds its opening reception.

Further actions, focused on taking back jobs, homes, and schools, will continue through the week.

A new report analyzes unemployment in Chicago and proposes a plan to add 40,000 jobs here.  Chicago has been particularly hard hit by the jobs crisis, according to the report; unemployment is double what it was five years ago, and remains in double digits.  “Chicago is rapidly losing its jobs base” and the stability it brings to communities and families, according to the report.

Over 272,000 Chicagoans are unemployed, with strong negative ripple effects – foreclosures up, vacancies and crime up, property values and local government revenues down, and cuts to education and public safety.  Nearly two-thirds of unemployed workers come from the service sector.

Researchers interviewed 14,000 unemployed Chicagoans and found they identified lack of jobs, particularly youth jobs, as a root cause of many community problems.

The report proposes a series of Chicago job corps focused on the social infrastructure – schools, health care, child care, neighborhood improvement and youth.

They’d pay for it with a financial speculation fee of 25 cents for each futures or options contract sold on the Chicago Mercantile Exchange or the Chicago Options Exchange.

Since the average contract is valued at $233,000, a 25-cent charge would have no impact on trades – but since over 12 million such contracts are executed each day, it would generate nearly $1.4 billion a year, based on last year’s trading volume.

It would be paid by traders, not by the exchanges;  it would cover financial instruments licensed to Chicago exchanges, which cannot be traded elsewhere.  (See Newstips 6-12-11 re. CME’s ongoing threats to leave the state unless they get a tax break.)

The Tribune recently reported that Bill Gates now backs a financial transaction fee, and in his new book, Ron Susskind reports that President Obama originally favored such a fee, but was blocked by advisers.

Last year 25 aldermen backed a hearing on a proposal for a voter referendum on instituting a financial transaction tax, but it was never brought to the Council floor.  Ald. Richard Mell proposed such a fee in the ’90s.

“Our city is facing a massive jobs crisis, one that requires direct and targeted job creation for those groups and communities hit hardest by unemployment,” according to the report.

“Our jobs plan will not only provide 40,000 Chicagoans with living wage, full-time jobs that match their existing skills and experience, but will serve as an investment in our communities, making them safer, stronger and more vibrant.”

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