October 30, 2020

Market and Financial News Aggregator

Billionaires battle over proposed Illinois tax hike on the wealthy

3 min read

Ken Griffin speaking at the 2018 Delivering Alpha Conference in New York on July 18th, 2018. 

David A. Grogan | CNBC

Billionaire hedge funder Ken Griffin is going head-to-head with the billionaire governor of Illinois over a plan to increase taxes on the wealthy.

Griffin, the founder and CEO of Citadel, contributed $20 million to a campaign opposing a ballot measure that would allow the state to increase taxes on high earners. Illinois governor J.B. Pritzker has given more than $56 million to a campaign in support of the plan —setting up a big-money battle to influence voters before Election Day.

The measure would repeal the state’s constitutional requirement for a flat income tax, meaning all taxpayers pay the same state income-tax rate, currently at 4.95%. Repealing the requirement would allow for a graduated income tax, imposing higher rates on the highest earners. Pritzker, a Democrat, and the legislature, which has Democratic majorities in both houses, have proposed a series of higher tax rates on those making more than $250,000 — or roughly the top 3% of earners in Illinois. The rates rise to 7.99% for joint-filers making more than $1 million a year.

Pritzker and other supporters say the tax hike would only effect the wealthy, while those making less than $250,000 would get a tax cut. They say the additional revenue, which they project at about $3 billion a year, is needed to prevent widespread cuts in jobs and services given the state’s budget shortfall of more than $6 billion, which is partly the result of the coronavirus pandemic.

Yet Griffin and other opponents say the tax hike will eventually hit all Illinois taxpayers without solving the state’s deeper problems of over-spending, waste and corruption. In a statement to CNBC, he said Illinois residents have been leaving the state for the past decade because of tax hikes and spending.

“What’s now being marketed to voters under the guise of a ‘fair tax’ is nothing more than a graduated tax scheme engineered to extract the greatest amount of money possible from all Illinois taxpayers,” he said in the statement. “It’s time the Governor and Illinois legislature stop taking advantage of constituents and wasting hard-earned taxpayer dollars. It’s time for the Governor and the legislature to focus on spending our money wisely to provide for better schools, better public safely, better infrastructure and greater opportunities for all our citizens.”  

Griffin, the richest person in Illinois with a net worth of about $15 billion, said he’s acting out of collective interest for the state, not his own welfare. He has given hundreds of millions to philanthropic and charitable causes in the state, and hired and employed thousands of local employees at Citadel. 

Yet Griffin could face a costly tax hike under the new plan. Press reports said he earned $1.5 billion last year. Assuming a state tax increase of 3%, he would owe $45 million more a year under the new tax rates, depending on how his income is treated for tax purposes.

Griffin, who is not afraid to speak out on broader political issues, makes for a rich target for left-leaning politicians. He purchased the most expensive home in the U.S. — paying $240 million for an apartment at 220 Central Park West in Manhattan — and spent more than  $100 million this year on painting by Jean-Michel Basquiat. His purchase in Manhattan triggered a political backlash that led to an increased “mansion tax” in New York CIty on the sale of expensive properties.

Griffin joins other wealthy Illinois taxpayers who have given money to defeat the tax plan, including a trust controlled by real estate investor Sam Zell, as well as MacNeil Automotive Products of Bolingbrook, which makes WeatherTech products and was founded by Dave MacNeil. 

The group lobbying in support of the tax hikes said billionaires like Griffin are simply protecting their fortunes.

“It’s no surprise he’s now doing everything he can to protect the special deal he gets under Illinois’ current tax system,” said Vote Yes For Fairness Chairman Quentin Fulks. “If Mr. Griffin would like to explain why he thinks it’s fair that he pays the same tax rate as our nurses and grocery store clerks, that’s a conversation we welcome having.”




2020-09-09 11:23:01


Read more from source here…

Leave a Reply