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*** UPDATED x1 - Rauner campaign, ILGOP respond *** A matter of trusts

Monday, Dec 4, 2017

* My weekly syndicated newspaper column

Last year, billionaire Democrat JB Pritzker derided Republican presidential candidate Donald Trump for not releasing detailed income tax filings.

“The question is who his investors are, and whether there are any in China or Russia that are affecting his personal income,” Pritzker said of Trump, adding that the future president was “obfuscating in order to avoid being discovered as a liar.”

And then last week, Pritzker released only the first two pages of his income tax returns going back three years. Pritzker told reporters for weeks that he hadn’t released the returns sooner because the task was so “complex.” Um, two pages ain’t “complex.”

Pritzker’s real income appears to come from various private trust funds. He disclosed last week that his trusts paid $25 million in state taxes and $129 million in federal taxes between 2014 and 2016. Pritzker’s personal income taxes were a tiny fraction of that amount. During the same time period, he revealed that he paid only $636,000 in state income taxes and $7.7 million in federal income taxes on his personal income.

He refused to divulge the tax returns for those trusts (which really would be “complex”) because, his campaign claimed, other members of his extended family also benefit from those trusts. OK, fine. But how about divulging the names of his trusts? Tracking down these trusts is a difficult business because they’re shrouded in such secrecy. Names would help.

When a politician refuses to divulge something, particularly after criticizing others for not doing so, you gotta wonder what that person is hiding.

The Pritzker family all but invented off-shore trusts. “No family in the U.S. can copy the Pritzkers in using offshore entities to gain tax advantages,” claimed Forbes magazine back in 2003.

In an attempt to pry Pritzker’s information loose, I reached out to Chris Kennedy’s gubernatorial campaign and asked if they would release the names of the trust funds Kennedy benefits from. They did.

George Skakel was Kennedy’s maternal grandfather. He was from Chicago and founded the fabulously successful Great Lakes Carbon Corporation.

But Kennedy’s a pauper when compared to Pritzker. As mentioned above, Pritzker’s paternal grandfather was a pioneer in using trusts to avoid taxation. Pritzker “took the family fortune from $250,000 in the 1920s to an estimated $2 billion at his death in 1986,” according to Forbes. But when he died in 1986, his heirs told the IRS that AN’s net worth was a mere $25,000. The feds didn’t buy it and the Pritzker family ended up paying the government $9.5 million plus interest nine years later, Forbes reported.

JB Pritzker’s sister Penny, who served as President Barack Obama’s Secretary of Commerce, is mentioned in the so-called “Paradise Papers,” a massive ongoing research project into the uber-wealthy and mega-corporations conducted by journalists all over the world. Ms. Pritzker transferred shares from two Bermuda companies to a company owned by trusts that benefit her children after she was confirmed for the Cabinet post. Her family’s myriad offshore trusts were a big issue during her confirmation hearing.

Alas, Kennedy’s decision to reveal his trust funds’ names did not move the Pritzker campaign one iota closer to disclosing the names of Pritzker’s trusts.

This ain’t over.

* Press release…

Today, Daniel Biss released a new video, “Trust,” in which J.B. Pritzker holds Donald Trump to a standard that he himself is unwilling to meet.

“The fact that Donald Trump has not released his tax returns…is an abomination. And we shouldn’t have candidates who don’t.”

Watch the video, “Trust”

“You shouldn’t have anybody on the ballot that’s running for governor, who doesn’t release their taxes,” declares Pritzker on camera.

Pritzker has been consistent in criticism of Donald Trump’s failure to release his taxes to the public. “The question is who his investors are,” said Pritzker in an Associated Press interview in July 2016. “He is obfuscating in order to avoid being discovered as a liar.”

“We have the same questions for Pritzker that he had for Trump,” says Biss spokesman Tom Elliott. “He hasn’t disclosed his income from his private trusts, or even their names, so we have no idea how much he’s making and who’s paying him. All we know is that he says he paid $125 million in taxes on his trust income. What could he be hiding?”

*** UPDATE *** Rauner campaign…

Pritzker continues to say one thing to Illinois voters while doing something completely different.

After seven months of delaying release of his tax returns, Pritzker finally released the first two pages containing information on his income.

Though he has often toted his ‘transparency,’ Pritzker refused to release even the names of the private trusts from which he draws the majority of his income.

His hypocrisy is stunning, but is just yet another example of this continued behavior. Just last week it was revealed that his investments directly contradict statements he provided to the Sierra Club at a candidates environmental forum.

Meanwhile, Bruce Rauner has fought for working families in Illinois. Governor Rauner is leading the fight against Madigan’s corrupt system with a reform plan that includes term limits, rolling back the Madigan income tax hike, and provide real and lasting property tax relief. Madigan has built a corrupt system over 40 years, and Governor Rauner is fighting to give power back to the people.

While Pritzker continues to deceive the people of Illinois, Governor Rauner works incessantly on their behalf.


* ILGOP press release…

After over 200 days of delay, J.B. Pritzker released a portion of his income tax returns, but his disclosed tax records raise more questions than answers.

Pritzker’s tax returns revealed that the vast majority of his income comes from inherited family trusts, not from salary income, business investments, or interest. Between 2014 and 2016, Pritzker paid $8.236 million in taxes on $29.6 million of declared personal income.

Those taxes pale in comparison to the income Pritzker derived from his inherited family trusts. During that same time period, Pritzker paid $128.97 million in federal taxes and $24.95 million in Illinois taxes on those trusts.

Unlike his opponent Chris Kennedy, why has Pritzker refused to answer questions on his family trusts?

Years of investigation and inquiry have revealed that the Pritzker family famously utilized trusts to protect their wealth from taxes and IRS scrutiny.

It’s clear - J.B. Pritzker is obfuscating on income derived from his inherited family trusts because he’s trying to hide the fact that he’s been avoiding taxes for years.

J.B. Pritzker’s campaign for governor is reaching the height of hypocrisy. Pritzker is advocating for yet another income tax hike on middle class families while cutting corrupt deals to slash his property taxes and using trusts to avoid taxes.

As Rich Miller said about J.B. Pritzker’s use of family trusts in his weekly column, “This ain’t over.”

* Related…

* Fact Check: Do Pritzker and Kennedy Have a Tax Transparency Gap?

- Posted by Rich Miller        

  1. - wordslinger - Monday, Dec 4, 17 @ 9:33 am:

    Über-rich guy problems could be Pritzker’s
    Achilles heel in the primary. But the crowded field remains to his benefit.

    I can’t see Rauner exploiting them in the general if JB gets there because he has his own rich guy problems.

    The exception, of course, is the toilets//property tax scheme. That might be the best fodder ever for a negative spot.

    I’ve been very surprised that JB didn’t try to get past that by pleading ignorance, throwing some of his accountants under the bus and writing fat checks to the taxing bodies. Could have possibly blunted the inevitable big media buy that will feature the toilet dodge.

  2. - Honeybear - Monday, Dec 4, 17 @ 9:48 am:

    I’m just speaking for me.
    I care but don’t care.
    Do I hate offshoring profits to avoid taxes?
    Yes, absolutely
    We’ll have to change that when we can.
    Do I hate that the wealthy don’t pay their share?
    Yes, absolutely
    We can change that with progressive income tax if we put a bill up by May 10, 2018
    I’m working with the
    Responsible Budget Coalition
    to make that happen. Super important work.
    Do I care that Pritzker offshores in trusts
    and doesn’t pay his fair share?
    I’m not happy about it but I can’t change that.
    I can work my butt off, which I am, to politically destroy Rauner.
    The person, I believe who has the best chance of winning is JB Pritzker.

    Kennedy usually doesn’t show up and bumbles when he does.

    Biss lives in a privileged progressive Ivory tower fantasy land.

    Pritzker is really a great guy. I’d like to play legos with him. He says all the right things. He seems to be doing great things.
    Could he change in office and screw me?
    But I don’t think so.
    But anyone
    And I mean anyone
    Is better than facing the
    absolute certainty
    of Bruce V. Rauner
    finishing the job in a second term of
    Destroying and privatizing state government
    Destroying and privatizing public education
    Destroying and privatizing social services
    But enriching
    The super wealthy
    Large corporations
    Consolidating power
    in the hands
    of a few.

    Keep this prayer in mind always.

    God grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.

  3. - Anonymous - Monday, Dec 4, 17 @ 10:08 am:

    Pritzker is untrustworthy. I think Illinois would get a continuation of the bad news lineup of Blago, Quinn, Rauner. They all talked a good enough game to get elected - voters can be idealistic, stupid, indifferent, or take your pick. The media has been lazy/enabling to the extent they take the politician at his word too often rather than dig, and earn their paycheck. Kennedy has many of the downsides of the rich kid playing with the power/ego of being a governor. Rauner, NFW.
    Pritzker, no way. Kennedy, less terrible. Halitosis is better than no breath at all. Kennedy best of the bad choices.

  4. - Responsa - Monday, Dec 4, 17 @ 10:11 am:

    Better. If audiences see it, this “Trust” ad gets Biss (and Kennedy) back in the game after Daniel’s last week’s disastrous anti-business ad that we reviewed here. As people get to know him better JB is acquiring a reputation as just another very rich pontificating hypocrite when it comes to several issues– including his tax returns. Does his staff not realize this and that it is hurting him badly with voters?

  5. - cdog - Monday, Dec 4, 17 @ 10:15 am:

    Pritzker has shown he’s willing to twist principles for his advantage.

    HB, I agree with alot of your sentiments, but the Illinois progressive tax will not eliminate 4-d chess financial games of the uber-rich, any more than it has at the federal level.

    (Miller wrote, “But when he died in 1986, his heirs told the IRS that AN’s net worth was a mere $25,000.” Truly a shocking event, but I couldn’t figure out who “AN” was. Tell a little more, please?)

  6. - Honeybadger - Monday, Dec 4, 17 @ 10:28 am:

    This honey badger agrees with honey bear 1000%.

  7. - Responsa - Monday, Dec 4, 17 @ 10:32 am:

    Abram Nicholas Pritzker (January 6, 1896 – February 8, 1986), known professionally as A.N. Pritzker

  8. - SSL - Monday, Dec 4, 17 @ 11:05 am:

    Two things really bug me about JB.

    First, he is a tax dodger of the highest order. You could make an argument that tax dodging is actually the family business. He has accumulated mass wealth through this very method, and yet his ads suggest he wants to make the 1% pay their share. When he has spent his entire life building wealth through tax avoidance, or worse, rax evasion, we are supposed to believe he wants the wealthy to pay their share. His revelation must have been very recent, since he ripped toilets out if the mansion not too long ago.

    Secondly, he was taped having a conversation with Blago, on the topic of political appointments. Was this an isolated lapse in judgment or do we have evidence that he is as slimy as Blago himself. And I don’t care if the feds decided not to bring charges. I don’t need the government to tell me that what he was doing was wrong.

    I just don’t trust the guy.

  9. - JohnnyPyleDriver - Monday, Dec 4, 17 @ 11:17 am:

    Pritzker’s shadiness is going to make a close race out of what should be a blow out. The voters in my precinct have already pegged JB as the rich, Chicago, Madigan pick. They start the race with a trust gap. Good luck filling it

  10. - Anonymous - Monday, Dec 4, 17 @ 11:37 am:

    Honeybadger- you’re Honeybear’s sister, right.

  11. - Honeybear - Monday, Dec 4, 17 @ 11:42 am:

    cdog, I agree a progressive income tax won’t do it all. It will help tremendously though. I think most average Illinoisans agree that the wealthy should pay more. Maybe I’m wrong on that but I don’t think so. I feel flat tax punishes the poor and middle class. Now that the Federal tax structure is going to change, I feel very strongly that we must seize the chance for a progressive tax while we can or risk increasing the income inequality to our great detriment. I’m not saying it will eliminate the “4D chess” but it will help bring in more revenue. We cannot allow ourselves to become Kansas.

  12. - cdog - Monday, Dec 4, 17 @ 11:54 am:

    hb, I’m for a progressive income tax if it is part of a tax swap to shift education funding back to the state.

    If there was a windfall to the state from passing progressive tax, and Ives, Rauner, Pritzker, legislature, or whomever, does not correct the un-constitutional situation we have now with education funding, that would be another movement in the Requiem of Illinois.

  13. - Honeybear - Monday, Dec 4, 17 @ 1:16 pm:

    cdog, I get you about education funding. I think it should be on the state. But progressive income tax is what’s on the plate now. It can’t be swapped given the constitutional nature.
    So, I say, lets get the progressive income tax and fine push education funding back onto the state. Is there any organization around an educational funding revert? My one concern would be opening the door to private school vouchers or funding. But hey, I’m good with the state funding idea. It would take a heck of a lot of pressure off of municipalities and county.

  14. - Rabid - Monday, Dec 4, 17 @ 2:07 pm:

    govenor rauner works incessantly on their behalf, please stop it hurts

  15. - Rabid - Monday, Dec 4, 17 @ 3:14 pm:

    the ilgop quotes a reporter the govenor thinks is playing games and won’t report the truth

  16. - Whatever - Monday, Dec 4, 17 @ 3:56 pm:

    The ILGOP press release and the little poster show that they wouldn’t benefit from having JB’s complete returns. They haven’t a clue about how taxation of trusts and their beneficiaries work. All of the income of a trust gets taxed either to the trust (at the highest individual rates on anything over a couple thousand dollars) or to the beneficiaries to whom it is distributed, but not to both. All that income the trusts paid tax on is not JB’s, and there is no telling how much income was distributed and taxed to other beneficiaries (and is also not his money). It’s highly doubtful that he has any control over the trusts, and the other beneficiaries might be a little upset with him if he did publish information about trusts that are as much theirs as his. The ILGOP also has zero basis for the claim that he is offshoring anything. The only way offshoring a taxpayer’s income avoids tax is by hiding the income in a bank or trust that won’t tell the IRS. If its disclosed to the IRS, it’s taxed. (Remember the fuss about the governor’s disclosed Cayman Island investments? The only reason people knew about them was because he disclosed them, and the fact that he disclosed them means he isn’t dodging any taxes.)

  17. - - Monday, Dec 4, 17 @ 6:33 pm:

    You get the simplest Web advertising options.

  18. - Rabid - Monday, Dec 4, 17 @ 9:28 pm:

    Why is there never a press release for Jennie ILGOP?

Sorry, comments for this post are now closed.

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