75% say "YES" to Reform TIFs, Tax Financial Transactions

By a 3-1 margin yesterday, voters asked government to:
1) impose a sales tax on financial transactions, such as derivatives and futures contracts, to address budget deficits and fund human needs.
2) Send accumulated TIF dollars back to the public institutions that would have been funded 'but for' the TIF.

Tax Financial Transactions:

"Politicians have not been taking this seriously, so we brought the issue straight to the voters," said Northside Action for Justice (NA4J) member Kelate Gaim. "Once people heard about this, a large majority wanted it to happen."

Hundreds of economists, civic leaders and organizations have endorsed a Financial Transaction Tax (FTT, sometimes called the Robin Hood Tax or Speculation Tax). Several countries already raise revenue through an FTT, and it has not harmed their finance sector. France and Germany are campaigning for an international FTT. But Wall Street opposes such a tax and many US politicians that want to curry favor with Wall Street donors are preventing a full debate.

"The big banks and the speculative traders at the Chicago Mercantile Exchange are the ones that created the crises, and they should pay to clean up the mess,' said NA4J member Kevin Brown. "It's wrong that some of the most profitable corporations, like Chicago Mercantile Exchange, extract millions of dollars in tax breaks but people lose human services and libraries and jobs. Why do I pay more sales tax when I buy a pair of shoes than these traders do placing speculative bets?"

The average contract at the CME is about $230,000, and traders currently pay no sales tax on the transaction. Adding just one dollar to each contract would generate about $6 Billion for the city or state. The tax would be paid by the traders, not the exchange.

Northside Action or Justice members have been working with coalition partners to stop the cuts to community services and rein in the Wall street abuses for years. In the fall, as low income people were being hit with outrageous late or overdraft fees, while big banks were back to record bonuses, NA4J decided to circulate petitions to place a nonpartisan advisory referendum on the ballot:

“Should local, state and federal governments adopt policies to tax speculative financial transactions including, but not limited to, derivatives and futures contracts, and use the revenue collected to fund the creation and maintenance of programs and services that help low and moderate income people meet basic human needs including jobs, affordable housing, health care and education?”

The FTT advisory referendum was on the ballot in 17 precincts of Chicago's 46th ward. Low turn-out and low interest on the Democratic side meant Republicans made up an unusually high percentage of those voting, more than 35% of ballots in many precincts, but the "Yes" vote was still overwhelming.

TIF Reform:

By a similar 3-1 margin, voters also said 'yes' to a TIF Reform question, asking:
"“Should the city of Chicago return all tax dollars held in TIF (Tax Increment Financing) districts that should have been allocated to the Public Schools, Parks and the County, to these public bodies and only be permitted to use future TIF revenues to preserve and develop affordable housing (including homeless shelters and transitional housing), living wage sustainable jobs and businesses and youth and senior services and programs?”

The Mayor's favorite slush fund has accumulated more than $800 Billion, money that would have been funding our schools, libraries and other public services, but have been siphoned off. The TIF program is notorious for being misused and abused. Rather than reduce poverty by creating jobs through development that could not happen 'but for' the TIF, these dollars are handed out to wealthy friends of the powerful.