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

Chicago Sun-Times - - CHICAGO SUN TIMES - BY RACHEL HINTON,

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.

Ken Grif­fin Gov. J.B. Pritzker

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