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CME QUESTIONS TAX PROPOSAL IN BUSH BUDGET

 CME QUESTIONS TAX PROPOSAL IN BUSH BUDGET
 CHICAGO, Jan. 29 /PRNewswire/ -- Jack Sandner, chairman of the


Chicago Mercantile Exchange (CME), commenting on a Bush Administration budget proposal that would impose a 15-cent-per-round-turn tax on trading at U.S. commodity and options exchanges, today said, "It is ironic that the President, having just returned from a trip to Japan aimed at bolstering American competitiveness, and having sent such a clear message in his State of the Union Address that economic growth in the U.S. is the key to the health of the nation at all levels, should now propose that this anti-competitive, anti-growth measure be applied to a healthy U.S. growth industry.
 "I am surprised that the Administration would propose this again," Sandner said. "Countless analyses and studies have shown, beyond any doubt, that a transaction tax on financial markets is a net loss to the American economy. Transaction taxes discourage business. They dry up liquidity and deprive markets of efficiency." He continued, "In these days of economic uncertainty and increasing competition from foreign markets, it would be self-defeating to strangle American financial markets with a transaction tax."
 "Unlike a decade ago," Sandner noted, "we compete today with more than 50 exchanges based in virtually every major world financial center, including Tokyo, London, Paris and Frankfurt. As a result, while the U.S. does continue as world leader, U.S. market share in worldwide futures and options trading has declined.
 "Imposing this tax, at this time, will simply make it less economical for market users to trade on U.S. exchanges, thereby handing an unnecessary advantage to our competitors from abroad. In the extreme, it could even drive some U.S. markets offshore -- the net result being lost jobs and lower tax revenue.
 "We relish competition. We seek no special favors or protection. We ask only that the global playing field remain level. This tax would most certainly tilt the playing field to our detriment."
 William J. Brodsky, CME president & CEO, said: "Regardless of how the Administration may wish to characterize it, this proposal is not about a 'user fee.' It looks like a tax, walks like a tax and quacks like a tax.
 "Attempting to raise revenue through a market transaction tax is penny-wise, but pound-foolish," Brodsky continued. "It is counterproductive to tax our markets at a time when other countries have reduced or eliminated transaction taxes on theirs. America's futures markets are the most efficient and innovative in the world. If we want to lose another vital edge to foreign competition, this is the way to do it."
 -0- 1/29/92
 /CONTACT: Joseph T. Whelan of the Chicago Mercantile Exchange, 312-930-8537 or fax: 312-930-3439/ CO: Chicago Mercantile Exchange ST: Illinois IN: FIN SU: ECO


JT -- NY100 -- 5004 01/29/92 18:54 EST
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Date:Jan 29, 1992
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