Another Bad Budget Idea

Among the many ways Conehead is trying to raise revenue is by taxing things that previously hadn't been taxed....or previously hadn't existed to be taxed. This might backfire:

• Chicago’s bid to become the Silicon Valley of the Midwest has registered some major wins in recent years: Google bought a huge downtown building, PsiQuantum Corp. announced a $1 billion investment in the city, and local startups raised a record $19 billion in 2022.

  Now a move to increase an unusual tax on cloud computing risks adding to a broader technology industry downturn to derail progress in the third-largest U.S. city.

The trouble with excessively taxing this type of company is that it has almost no physical structure. You push a few buttons and ::poof:: it's somewhere else with a lower tax rate. This was proven a few years ago when (we think) the Mercantile Exchange ran a weekend test with a "shadow trading floor" somewhere else (Texas maybe?) and it worked. One of the single biggest money generating enterprises temporarily disappeared from Chicago over a weekend while the City Council debated instituting a tax on every individual trade made on the "floor."

Needless to say, that idea disappeared instantly when the Council realized the "floor" was nothing but a collection of electrons that could be re-constituted anywhere else....except Chicago. The only limit to any of this was (A) electrical power and (B) imagination. Power is fungible, crosses state lines and Illinois is rapidly running out of electricity for things here even without adding in data centers and such.

Overreach by Conehead could be disastrous to what remains of the corporate tax base.