BATTLE OF THE BILLIONAIRES
Illinois’ richest man donates $20M to prevent graduated income tax, and that’s a fraction of how much Pritzker has spent to support plan
Ken Griffin donates $20M to thwart gov’s ‘fair tax’
Illinois’ richest man kicked in $20 million to fight Gov. J.B. Pritzker’s proposed graduated income tax, setting the stage for a costly Election Day showdown on the ballot initiative.
It also puts two of Illinois’ richest men squarely on opposite sides of a battle over changing the tax code to hit high-income earners harder.
As big as the eight-figure donation is from Ken Griffin, the founder and CEO of hedge fund Citadel, it’s a fraction of what Pritzker has already ponied up.
The Democratic governor has personally dropped $56.5 million of his fortune into the “Vote Yes for Fairness” committee, which is focused on getting the ballot initiative passed.
Griffin is worth an estimated $12.1 billion, according to Forbes’ latest ranking of the world’s billionaires. That makes him the state’s richest man. Pritzker ranks sixth in the state with a fortune estimated at $3.4 billion from his Hyatt Hotels holdings and a private equity firm he once ran.
In a statement, Griffin said people aren’t waiting until November to “vote against the economic hardship created by Springfield’s spending addiction — they’ve been voting with their feet for the past decade as Illinois has lost more residents than any other state in the nation.
“In that time, two tax increases have already failed to improve our situation, and what’s now being marketed to voters under the guise of a ‘fair tax’ is nothing more than a progressive tax scheme engineered to extract the greatest amount of money possible from all Illinois taxpayers,” Griffin’s statement continued.
“As we’ve seen in other states with a progressive tax scheme, everyone inevitably pays a higher rate.”
But John Bouman, chairman of the “Vote Yes For Fair Tax” campaign, countered that Griffin’s donation helps “protect the broken status quo.”
“Griffin took home $1.5 billion in 2019 alone, yet paid the same state income tax rate as teachers, nurses, grocery store clerks and other essential workers,” Bouman’s statement continued. “That’s wrong, and it’s exactly why Illinois needs the Fair Tax amendment.”
Quentin Fulks, who heads the “Yes For Fairness” committee Pritzker has donated to, said in a statement “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.”
The Coalition to Stop the Proposed Tax Hike Amendment — the group that Griffin contributed to last week — said they’re encouraged people are “responding positively to our message that this is the worst possible time to raise taxes.”
“The coalition welcomes support from anyone who believes we must stop Springfield politicians from having new power to increase income taxes on every group of taxpayers, whenever they want,” the group said in a statement.
Passing what he dubs the “Fair Tax” has been one of Pritzker’s top priorities since he took office last year. While opponents argue the proposal opens the door for further tax hikes down the road to pay off the state’s massive debts, Pritzker portrays it as a way to get the rich — including himself — to pay their fair share.
Pritzker and his wife reported $5.5 million in taxable income for 2018. Trusts benefiting the Pritzkers paid $5.3 million in Illinois taxes at a rate of 6.45% and $29 million in federal taxes.
The first-term governor also donated a record-setting $171.5 million to his own gubernatorial campaign.
Pritzker’s donations to the pro-graduated income tax committee are bankrolling the effort to get the initiative passed in November. Besides the $56.5 million he’s donated, only $586.11 has been donated to that committee, largely from the financial services company Northern Trust.
That company is the one Pritzker selected to manage his personal assets when he placed his investments into a “blind trust” before taking office.
Bouman’s separate committee, the “Vote Yes for Fair Tax” group, has nearly $1.8 million in its coffers, state election records show.
News of Griffin’s donation follows unions, including SEIU Healthcare and the Chicago Federation of Labor, throwing their support behind the proposed amendment on Thursday. Both labor organizations have an ownership stake in Sun-Times Media.
The AARP is also on board with the change in the state’s tax structure, launching ads last month supporting the proposed tax amendment that asked people “if you’re not a billionaire, why are you taxed like one?”
Business owners are largely behind the effort to stop the proposed change in the tax code. Todd Maisch, head of the Illinois Chamber of Commerce, and other business leaders held news conferences in July in Chicago, Springfield, Peoria and Rockford to announce a grassroots campaign against the proposal.
Under the proposal, incomes between $250,000 and $500,000 would be taxed 7.75%. It would maintain the current tax rate of 4.95% on incomes between $100,000 and $250,000. Income from $500,000 to $1 million would be taxed 7.85%, while income over $1 million would be taxed 7.99%. For those earning incomes of $100,000 or less, the rate would dip down to 4.9%.
Voters are not deciding on the rates when they cast their ballot in November, however.
Should voters approve the constitutional amendment, the new tax rates would go into effect Jan. 1, 2021.