Billionaires battle over proposed Illinois tax hike on the wealthy

Billionaire hedge funder Ken Griffin goes head-to-head with the billionaire governor of Illinois over a plan to extend taxes on the rich.

Griffin, the founder and CEO of Citadel, contributed $20 million to a marketing campaign opposing a poll measure that will enable the state to extend taxes on excessive earners. Illinois governor J.B. Pritzker has given greater than $56 million to a marketing campaign in help of the plan —organising a big-money battle to affect voters earlier than Election Day.

The measure would repeal the state’s constitutional requirement for a flat revenue tax, that means all taxpayers pay the identical state income-tax fee, at the moment at 4.95%. Repealing the requirement would enable for a graduated revenue tax, imposing greater charges on the best earners. Pritzker, a Democrat, and the legislature, which has Democratic majorities in each homes, have proposed a collection of upper tax charges on these making greater than $250,000 — or roughly the highest 3% of earners in Illinois. The charges rise to 7.99% for joint-filers making greater than $1 million a 12 months.

Pritzker and different supporters say the tax hike would solely impact the rich, whereas these making lower than $250,000 would get a tax lower. They are saying the extra income, which they challenge at about $Three billion a 12 months, is required to stop widespread cuts in jobs and companies given the state’s finances shortfall of greater than $6 billion, which is partly the results of the coronavirus pandemic.

But Griffin and different opponents say the tax hike will finally hit all Illinois taxpayers with out fixing the state’s deeper issues of over-spending, waste and corruption. In a press release to CNBC, he mentioned Illinois residents have been leaving the state for the previous decade due to tax hikes and spending.

“What’s now being marketed to voters beneath the guise of a ‘honest tax’ is nothing greater than a graduated tax scheme engineered to extract the best sum of money doable from all Illinois taxpayers,” he mentioned within the assertion. “It is time the Governor and Illinois legislature cease making the most of constituents and losing hard-earned taxpayer {dollars}. It is time for the Governor and the legislature to give attention to spending our cash properly to offer for higher faculties, higher public safely, higher infrastructure and better alternatives for all our residents.”  

Griffin, the richest particular person in Illinois with a web price of about $15 billion, mentioned he is appearing out of collective curiosity for the state, not his personal welfare. He has given tons of of thousands and thousands to philanthropic and charitable causes within the state, and employed and employed 1000’s of native staff at Citadel. 

But Griffin may face a expensive tax hike beneath the brand new plan. Press stories mentioned he earned $1.5 billion final 12 months. Assuming a state tax enhance of three%, he would owe $45 million extra a 12 months beneath the brand new tax charges, relying on how his revenue is handled for tax functions.

Griffin, who just isn’t afraid to talk out on broader political points, makes for a wealthy goal for left-leaning politicians. He bought the most costly residence within the U.S. — paying $240 million for an apartment at 220 Central Park West in Manhattan — and spent greater than  $100 million this 12 months on portray by Jean-Michel Basquiat. His buy in Manhattan triggered a political backlash that led to an elevated “mansion tax” in New York CIty on the sale of high-priced properties.

Griffin joins different rich Illinois taxpayers who’ve given cash to defeat the tax plan, together with a belief managed by actual property investor Sam Zell, in addition to MacNeil Automotive Merchandise of Bolingbrook, which makes WeatherTech merchandise and was based by Dave MacNeil. 

The group lobbying in help of the tax hikes mentioned billionaires like Griffin are merely defending their fortunes.

“It is no shock he is now doing every little thing he can to guard the particular deal he will get beneath Illinois’ present tax system,” mentioned Vote Sure For Equity Chairman Quentin Fulks. “If Mr. Griffin want to clarify why he thinks it is honest that he pays the identical tax fee as our nurses and grocery retailer clerks, that is a dialog we welcome having.”