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Macomb, IL – This Thanksgiving, we might give thanks that debates aren't always rich and poor or strong and weak. Sometimes it's right and wrong.
When a few government leaders, billionaire Bill Gates, the Pope and Occupy protestors find common ground, some rich, poor, strong and weak are on the same side. And it's right.
But in Illinois, it feels wrong.
Thousands of demonstrators this month gathered at the G-20 summit in France, protesting governments' failure to defy Big Business and calling on the world's top state economies to enact a tax on financial transactions.
Days earlier, both Catholic and Protestant leaders also called for such a tax - and for political leaders to question bailing out private banks with public money, to develop the real economy instead of speculating, and to create a global financial authority to coordinate economics for the common good.
The economic crisis, the Vatican said, "has revealed behaviors like selfishness, collective greed and hoarding of goods on a great scale." The Anglican Church's Archbishop of Canterbury Rowan Williams also defended the tax plan, saying, "The objections made by some who claim it would mean a substantial drop in employment and the economy seem to rest on exaggerated and sharply challenged projections and ... ignore the potential of such a tax to stabilize currency markets in a way to boost, rather than damage, the real economy."
In Illinois, meanwhile, the legislature's Fall session saw lawmakers weigh a plan NOT to tax financial transactions, but to CUT the taxes of corporations in that business, specifically the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME), which threatened to move after the General Assembly raised corporations' income tax from 7.3% to 9.5%.
That's as sensible as Herman Cain hiring Lindsay Lohan for public relations.
Less timid leaders such as Gates and German Chancellor Angela Merkel support taxing financial transactions. Known as a Tobin Tax - after Nobel Prize-winning economist James Tobin, who proposed it in 1972 - this would levy a tiny amount on financial transactions such as stock trades. A tax of one-half of 1% would yield billions of dollars, Tobin said.
The G-20 considered the idea in 2009 at its Pittsburgh meeting, where some said they'd support it - if it were adopted globally by all major trading nations.
This year, back in Springfield, the legislature's deference to the CBOE and CME is reminiscent of lawmakers cowering before sports owner Jerry Reinsdorf's threat to move the White Sox to Florida, and passing a measure giving Reinsdorf $200 million in public financing for Cellular Field.
DePaul University professor and author Paul Buchheit of the tax-fairness advocacy group US Uncut says, "The Chicago Mercantile Exchange took a remarkable 54% of its 2008-10 $8 billion revenue as clear profit. That's a higher percentage than any of the top 100 companies in the country!
"Illinois corporate taxes are NOT too high - at least for top-earning companies," Buchheit adds. "A review of corporate [reports] provides the facts: If just 20 large Illinois firms had paid state taxes at the required statutory rate (7.3%) over the past three years, an additional $7.5 billion would have been returned - about half of the state's current deficit."
Instead, his group's analysis of Securities and Exchange Commission records from big Illinois corporations finds an average tax payment to the state of less than a third of the old corporate rate.
In alphabetical order, these 10 top Illinois companies together made $132.5 billion in net income before taxes and paid $2.7 billion in state taxes: Abbott Labs, Archer Daniels Midland, Boeing, Caterpillar, Cisco Systems, Deere & Co., Exelon Corp., Kraft Foods, McDonald's and Walgreen Co.
That's an actual tax rate of 2.1%.
Buchheit asks, "How much money could be generated by a financial transaction tax in Illinois? The CME Group, which includes the Chicago Board of Trade, handles about three billion annual contracts worth well over $1 quadrillion. One-thousandth of 1% of that (about a dollar for every $100,000) would pay off the total budget deficit of Illinois."
The Vatican was diplomatic, saying "The people on Wall Street need to sit down and go through a process of discernment."
Progressive writer Bill Moyers was more forceful, saying, "Our politicians are money launderers in the trafficking of power and policy."
Those Illinois corporations should count their blessings and share their harvest and the state's woes with us natives.
Bill Knight is a freelance writer who teaches at Western Illinois University. The opinions expressed are not necessarily those of WIU or Tri States Public Radio