Billionaire Ken Griffin spends $20M to campaign against Illinois tax hikes
Voters need to approve a ballot measure in order for the state to change its income tax structure
A battle is brewing in Illinois over a November ballot measure that could allow the government to change its flat-rate income tax structure to a progressive system, which has drawn criticism from some powerful residents.
Ken Griffin, the founder and CEO of Citadel, has donated $20 million to a campaign that opposes the ballot measure.
He said in a statement that Illinois has been losing residents at a faster pace than other states for the past decade, and a change in the tax structure would ultimately end up costing all families more.
“In that time [the past decade], 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 graduated tax scheme engineered to extract the greatest amount of money possible from all Illinois taxpayers,” Griffin said. “As we’ve seen in other states with a graduated tax scheme, everyone inevitably pays a higher rate.”
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Griffin has been a Chicago resident for three decades, according to an opinion article that he wrote for the Chicago Tribune, and is speaking out against the measure in hopes of helping the state’s economy.
He is not the only powerful Illinois resident to take a stand against the progressive tax proposal. A real estate trust run by Sam Zell donated $100,000, as did MacNeil Automotive Products, which produces WeatherTech products, as reported by the Chicago Tribune.
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Under Democratic Illinois Gov. J.B. Pritzker’s proposal, some taxpayers’ rates would be raised above the current flat rate of 4.95%.
Lower-income individuals would pay rates between 4.75% and 4.9%. Those with incomes between $100,000 and $250,000 would pay the 4.95% rate. The top rate, however, for joint filers with incomes more than $250,000 would reach 7.75%; 7.85% on incomes more than $500,000 and 7.99% for people making more than $1 million.
The switch to a progressive income tax structure will depend on voters, who will be asked to approve a constitutional amendment that would allow for a progressive income tax bracket system. As it stands, the state constitution calls for a flat tax rate, and 60% of voters need to vote “yes” for the provision to be approved.
Pritzker has donated more than $50 million to support the adoption of the measure.
The revised tax rates would earn the state an extra $3.6 billion in expected revenue. The change would not take effect until 2021.
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Due to the coronavirus pandemic, it has been estimated that Illinois could face a budget shortfall of $7 billion over the coming two years.
Many other states are in similar situations, and officials are looking to tax increases to help raise revenues.
The Nashville City Council approved a budget that contained what it acknowledged would be a “painful” property tax increase on its residents.
Two other states, Colorado and California, are eyeing property tax increases as lawmakers look to patch respective budget holes. However, both have to repeal measures that were previously put in place to limit sky-high tax rates, which is underway in each state.
Meanwhile, Seattle is looking to impose a payroll tax on the city’s highest-paid employees, working at its largest employers.
New York City Mayor Bill de Blasio has indicated he is not opposed to raising taxes on the rich, though New York Gov. Andrew Cuomo said it should be a last resort.