Escape From Illinois, Cont.

Now the Chicago Merc wants relief.

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The line of businesses looking for tax relief in Illinois keeps growing, with the latest plea coming from the owner of the iconic Chicago Mercantile Exchange and Chicago Board of Trade. CME Group Executive Chairman Terrence Duffy told a shareholders meeting last week that Illinois Governor Pat Quinn’s 30% hike in the corporate tax rate enacted in January will cost the company $50 million this year. “We don’t want to leave Chicago,” Mr. Duffy said, but “we have to do what’s right for our shareholders.” A spokesman confirmed that the company is exploring all options to save money.

We reported last week that dozens of major Illinois firms—from Caterpillar to Motorola to Sears—are in open rebellion in the wake of Springfield’s $6 billion revenue grab and new 9.5% corporate rate, fourth highest in the U.S. Mr. Quinn has already carved out some $230 million in special tax breaks this year to save companies from his own tax policies and keep these firms from fleeing.

Our guess is that Mr. Duffy’s statement is also an attempt to bargain for better tax treatment, and it’s hard to blame him. The Chicago Tribune reports that CME pays 8.9% of its income in state tax, while most businesses pay well below 7% and many pay no tax at all thanks to rich deductions. Mr. Quinn says he’s having an “ongoing conversation” with CME, and we’ll bet a February pork belly contract that he’ll deliver the bacon.

The Merc and Board of Trade are Chicago’s equivalent of Wall Street, engaging in trillions worth of trades each year and directly employing some 2,000 employees. At least 60,000 more Chicago-land workers have jobs linked to the trading centers. Losing the companies would be a huge psychological blow to the city and state, in addition to the hardship for individuals.

Meanwhile, nearby Indiana, which has vastly improved its business climate under Governor Mitch Daniels, has come up with a new ad campaign to lure jobs across the border: “Illinnoyed by Higher Taxes? SolutionIndiana.com.” Mr. Quinn may have to pay more than he ever imagined to counteract the results of his antibusiness policies.

Copyright 2011 Dow Jones & Com

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