CHICAGO (Reuters) – Stand Up Chicago, a coalition planning a protest against economic inequality on Monday, wants to levy a $1.4 billion tax on trading at the city’s biggest financial exchanges to fund a jobs program.
Calling CME Group Inc and CBOE Holdings Inc “giant casinos” that fuel the kind of “excessive risk-taking” it says brought on the financial crisis, the group is floating a 25-cent-per-contract tax on the two exchanges.
Such a tax would generate $1.4 billion in yearly revenue and help create 40,000 jobs for the unemployed in the city, the group said in its jobs plan blueprint, available at //standupchicago.org/files/2011/10/Chicago-Community-Jobs-Plan.pdf.
The idea of a transaction tax on the derivatives industry has a long history, but exchanges have historically fought off such proposals by arguing that a tax would simply send trading elsewhere, resulting in a net loss of jobs and no added revenue.
CME and CBOE executives have already been considering pulling up their Chicago stakes and relocating to other states to avoid steep tax hikes imposed by Illinois earlier this year.
A CME spokesman declined to comment on the proposal. A CBOE spokeswoman did not respond to a request for comment.
Stand Up Chicago expected thousands of people to join marches from five different downtown locations later on Monday “to reclaim our jobs, our homes and our schools,” the group’s web site said.
The marchers were expected to converge on the Art Institute of Chicago, where the Futures Industry Association is having a reception for its annual Chicago Expo.
(Reporting by Ann Saphir; Editing by Cynthia Johnston)
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