CTU chief says transaction tax would save pensions, make traders ‘heroes’
BY BECKY SCHLIKERMAN Staff Reporter May 6, 2014 7:37PM
Karen Lewis, president of the Chicago Teachers Union, supports a financial transaction tax as one way to fix the state's pension crisis and shore up the Chicago Public Schools budget. | Michael Schmidt/Sun-Times
Updated: June 8, 2014 6:36AM
A tax that financial traders in Chicago would pay on each transaction could solve the pension crisis, generate revenue and “make heroes” out of the wealthy men and women who work on LaSalle Street, Chicago Teachers Union President Karen Lewis told the Chicago Sun-Times editorial board on Tuesday.
Lewis and the union have proposed the so-called LaSalle Street Tax as a way to fund public pension obligations.
William Barclay, an economist advising the CTU, estimates a $1-to-$2 tax levied on the sellers and buyers of futures, futures options and securities option contracts traded on the Chicago Mercantile Exchange and the Chicago Board Options Exchange could raise up to $12 billion a year for the state, some of which could be used for pensions.
The editorial board asked Lewis why financial traders would want to give up that much money, and why the proposed tax wouldn’t just make them trade somewhere else.
“This is an opportunity to actually make heroes out of these people. Instead of everybody being angry at them about their money and their greed and all these other things. This is an opportunity for them to say, ‘You know what, we’re part of the city. We love this city. We’d like to see the city work. We’d like to be a part of the process and this isn’t going to be enough to make us want to go,’” Lewis said.
But Lewis’ reasoning apparently isn’t convincing some who would be affected.
CME Group, which operates the Chicago Mercantile Exchange, opposes the tax, said spokeswoman Laurie Bischel.
“CME Group absolutely believes that our hometown of Chicago should have a strong, world-class public education system,” Bischel said, adding that the futures exchange company has donated millions of dollars to educational initiatives over the years.
“However, we do not believe the way to accomplish a strong public school system is through singling out futures traders with a tax more than 200 percent higher than what the average trader pays to buy or sell a futures contract,” Bischel said. “Futures traders do not have to do their business in Chicago today and this tax would make sure that they don’t do business in our city going forward.”
A spokeswoman for the Board Options Exchange could not immediately comment.
A financial transaction tax faces several legal hurdles, including a change in state law, according to a City Hall official.