Explaining my importance to society as a liquidity provider often falls on deaf ears. It is a communication issues and to be honest that is part of the allure for me. Trading is not easy, there are many sacrifices. Like anything with a high risk, high reward people tend to attack you. People attack what they do not know. The latest attack is from the city of Chicago.
I love living in Chicago. There are few places I would rather be than Chicago in the summer. The people are nice, the city is clean, and the food is great. What I hate about Chicago is the taxes. I never paid attention to taxes till I moved to Chicago. Goods are 11.25% depending where you are, get a bottle water add a few more percentage points, hotel taxes are 20%, and the revenue department could be charged with stalking.
If you hang out on Rush Street you will see there is plenty of money. Any car you can imagine is in the parking garage of CBOT. Less now than ever before. There is a confluence of new and old money throughout the city. Take a walk down Burling Street between Webster and North and you will see modern day castles. Wherever there is old money there are high taxes. Partly from guilt and partly because “what is a few extra dollars”. High taxes have already wounded the conference business, in all fairness economy has not helped. A friend works for a union that sets up conferences and he has worked about 3 months in the last 2 years. I have another friend who works in an electricians union. He has to bar tend because he has not worked for 8 months.
The city of Chicago, like the Federal and State governments, are proposing a transaction tax. I do not think it has a chance in hell of passing but I did not think the bottle water tax would pass. I also did not expect costs to go up for less services.
I am not against taxes at all. I am against using the money wrong. If they used the money efficiently I would pay 50%. If you are a full time trader chances are you are paying a lower tax rate than most people. Futures are taxed 60/40, ordinary income and capital gains. We also tend to spend more, have more “things”. I do not have a clue how many jobs I create but I know my spending helps.
My concerns are the psychological effects of taxes. Removing the motivation to produce. The pie is getting smaller as it is, we need people to make an efficient market. Without people the general purpose of futures market, to stabilize prices, disappears. We are seeing that now in meats and grains.
It is not the few cents that really matter, but where does it stop? Does it stop? My experience is that it never stops. They say the tax is because:
“Voters and reporters rightly ask how we will pay for all the campaign promises we make this time of year. I believe we should do it by asking the speculators on LaSalle Street and Wall Street to pay for their fair share of what it costs to run a city in a global economy.”
Fair is a four letter word. The global economy excuse is bullshit and why should someone in Kansas pay the city of Chicago. The financial industry is going through segmentation, that should be a clue to the governments. Trading firms are moving to lower tax markets. Instead of hiring accountants they are just skipping that step and moving. I will miss Chicago for sure but I look forward to moving to wherever I do not have to defend myself from taxes and fees. Hopefully the weather is better in the winter.