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* From a press release…
A new animated video released by the Quinn for Illinois campaign explains exactly why strategies used by people like Republican billionaire Bruce Rauner to shelter their money in the Cayman Islands have a direct impact on taxes, services and economic growth right here in Illinois.
Produced by Austin-based animator Kristen Maxwell and Michael Brandl, an economist at the Ohio State University’s Fisher College of Business, the 4:30-minute video dives into questions surrounding private equity, and the ways the super-wealthy manipulate their advantages to the detriment of Illinois.
The video shows the three main effects Cayman Islands schemes have on everyday Illinoisans:
1. It raises their tax burden because labor, unlike capital, can’t easily go to the Caymans.
2. It leads to cuts because of tax revenue lost to the Caymans.
3. It takes investment dollars out of the Illinois economy - leading to a loss in potential growth here.
* Have a look…
posted by Rich Miller
Wednesday, Aug 6, 14 @ 9:53 am
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Previous Post: Illinois Freedom PAC launches TV ad
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C- Starts out cute, but really 4:30 minutes long. I couldn’t watch the whole thing, I lost interest.
Comment by Concerned Voter Wednesday, Aug 6, 14 @ 10:01 am
Skipping the video for the moment….but a very related part is how much expense can Flip route to the Cayman’s for his fully reported investments to pay? Houses, cars, horses that is another benefit of this approach. Not only do you pay little or not tax, but you shave some expenses that the rest of mopes must pay with IL income.
Comment by CircularFiringSquad Wednesday, Aug 6, 14 @ 10:03 am
OMG, according to this, Bruce Rauner is not just responsible for the horrible jobs climate in Illinois, he is responsible for all of the economic woes in the country. The man who killed the next Bill Gates?
Other than the laughable premise, this video is more preaching to the lefty socialist choir and trying to educate economically “uniformed” journalists than it is to prusuade any voters.
Comment by Western Ave. Doug Wednesday, Aug 6, 14 @ 10:03 am
Reminds me of the ESPN program “Numbers Never Lie”.
Go to The YouTube, check of just 10 seconds of one, same exact concept.
The point? You are taking 4-5 minutes in cartoon fashion to describe something, and while it may keep your interest, people watching “NNL” are interested in the show, how navy are going to be interested enough to watch this(?)
Meh, but I really enjoyed the “NNL” idea of explaining, but how many more will too?
Comment by Oswego Willy Wednesday, Aug 6, 14 @ 10:04 am
Four and a half minutes watching a dead horse get whipped with explanations.
We’re seeing a flood of Americans doing whatever they can to avoid being overtaxed. It is their money. Its pathetic.
It is like watching animated mosquitoes complaining about how some people put screens on their windows, forcing them to bite the unprotected people more than once.
It is like watching a butcher complain how the animals don’t like getting slaughtered, so it means the animals like watching children go hungry.
It is like watching a Mucinex phlegm ball complaining about how the sick guy takes medicine in order to feel better.
It is like listening to Dracula complain about how the peasants are all wearing garlic, forcing him to tap out his blood bank.
Taxes are not as important than the success that gets taxed.
This is so twisted. You want or need more tax revenue? Keep the tax rate livable, so that it doesn’t force people out of the country.
Comment by VanillaMan Wednesday, Aug 6, 14 @ 10:08 am
I say we declare war on the Cayman Islands!
Comment by Norseman Wednesday, Aug 6, 14 @ 10:09 am
Interesting timing on the video in terms of it’s release (today)…
Who paid for this?
I going to go out on a limb here and guess that a Economics prof and an animator from Austin just didn’t feel the urge to do this one afternoon, might be wrong about that but that is my guess.
Comment by OneMan Wednesday, Aug 6, 14 @ 10:09 am
Someone should ask Quinn where his clothes are made, food was grown, car was assembled, and retirement investments are located. If any of it is outside Illinois, he’s just made a commercial about his own economic activity.
Comment by Right Field Wednesday, Aug 6, 14 @ 10:11 am
Next question, if the avoidance of tax is the problem, should the state stop working with companies that do that sort of thing?
For example the way Google handles some transactions, should the state ask Google to leave Illinois?
Comment by OneMan Wednesday, Aug 6, 14 @ 10:12 am
Yeah, thousands of Undecided voters are sure to flock to the Quinn website to watch a five minute cartoon on off-shore tax havens.
What a waste of resources. The media battlefield is now on TV. Entertaining yourself by producing videos for voters you already have in the bank is pointless and stupid.
Back in day, George Ryan stung Jerry Cosentino but good with a spot about how Cosentino moved his trucking company to Indiana to dodge Illinois workmans comp. laws.
Produce something like that for a mass audience, in 30 seconds, not five minutes, and then you have something.
Comment by wordslinger Wednesday, Aug 6, 14 @ 10:13 am
Right Field:
I think more regular folks know that their clothes are not made in IL, and that their retirement funds are invested in non-IL companies. Very few voters have the ability to open a Cayman bank account.
Comment by Snucka Wednesday, Aug 6, 14 @ 10:16 am
If it’s so horrible to invest overseas through this route, then why does the State do it?
Comment by Anonymoiis Wednesday, Aug 6, 14 @ 10:17 am
==Very few voters have the ability to open a Cayman bank account.==
Unless they have a 401k or State pension
Comment by Anonymoiis Wednesday, Aug 6, 14 @ 10:19 am
Great idea, but poorly executed and too long. They couldn’t have gotten John Green (friend of Sen. Daniel Biss, author of the The Fault in Our Stars and genesis of the “Crash Course” history videos on YouTube) to throw this together? He can cover the entire Renaissance in less than five minutes with better doodles and a sense of humor.
Comment by Commander Norton Wednesday, Aug 6, 14 @ 10:21 am
You lost me at 4:30 on this one. Didn’t look at it so I won’t comment on it. The commodity of time is something that requires respect. Over 4 minutes is an eternity in today’s world. Fails for me before it gets out of the gate…cause it doesn’t.
Comment by A guy... Wednesday, Aug 6, 14 @ 10:21 am
They couldn’t find any economists at either of our two world class business schools in Chicago? Had to go to an out of state school?
Lots of ifs, buts and coconuts. One could also make an argument that the burdensome regulatory structure in Chicago or Illinois also contributes to the lack of growth. Bottom line though, if your idea is “The Next Bill Gates” good, it will get funded. Show a VC how you can make them millions, and they really don’t care about tax rates.
Sounds more like we need to reform corporate taxes on a national level. You know, like what every other economist is saying with the tax inversion stories.
Comment by ChrisB Wednesday, Aug 6, 14 @ 10:27 am
==Sounds more like we need to reform corporate taxes on a national level. You know, like what every other economist is saying with the tax inversion stories.==
This. The solution to keeping business here is to make us competitive that they’ll want to stay here, instead of threatening to force them too.
Comment by Anonymoiis Wednesday, Aug 6, 14 @ 10:33 am
change the tax code. Markets are designed to find efficiencies. The tax code, in part, is written to effect behavior so I don’t blame people for the behavior as long as it is legal. I do think though that if you are running for office and you have taken advantage of certain tax laws then that persons position on taxes is fair game.
Comment by facts are stubborn things Wednesday, Aug 6, 14 @ 10:36 am
Just say that Rauner is a tax dodger!!! That was about 3 minutes to long.
Comment by Obamas Puppy Wednesday, Aug 6, 14 @ 10:38 am
OK, I admit that I found it interesting. I watched the entire thing. I thought it was a good use of four minutes for me.
I knew “moving money to Caymans” was bad, but I wasn’t sure of the reasons. This provided a good explanation of the issues.
Is this going to sway people? Maybe or maybe not.
But yesterday we all commented about “low information voters.” Here is an attempt to provide information and raise the level of discussion. I think that is a good thing.
Overall, I give them a solid A for this effort.
Comment by Gooner Wednesday, Aug 6, 14 @ 10:40 am
–The solution to keeping business here is to make us competitive that they’ll want to stay here, instead of threatening to force them too. –
For crying out loud, nobody’s moving “business” to the Caymans. They’re sheltering assets in a sovereign sandbar with a tax gimmick and bank secrecy. The risk you take is with rule of law, that one day your money will just disappear and you have no way of clawing it back.
Comment by wordslinger Wednesday, Aug 6, 14 @ 10:41 am
Once more Slinger, I agree with you about everything but the “secret” part. That’s proving not to be true.
Comment by A guy... Wednesday, Aug 6, 14 @ 10:46 am
Ok..I watched for about 2 minutes tops… Then I want to figure out if my $5000 or such in stocks can be moved to the Caymans????!!!! Do I give an A for the video if this somehow is possible.. Then in 4 years, I will be uber rich… And I will run for Gov..Forget backing OW… He can work for me…
Comment by Walter Mitty Wednesday, Aug 6, 14 @ 10:48 am
It is what it is, and it certainly was not intended for a mass audience.
So, why the news release? Dunno. Ask 270 Strategies, they are Quinn’s digital media consultants.
The animation and narration are very good. I would tweak a few things here and there that would make it much, much more effective.
For example: video never mentions Bruce Rauner or his firm once.
Comment by Yellow Dog Democrat Wednesday, Aug 6, 14 @ 10:52 am
If you just watched from 2:00-2:35 you would think this was a Rauner video.
Intended functional utility is unclear.
Comment by North Shore Joe Wednesday, Aug 6, 14 @ 11:04 am
I think the quality of the graphics is great. However, it is far too long for most people to watch.
Comment by Hit or Miss Wednesday, Aug 6, 14 @ 11:28 am
Vanilla Man said “Keep the tax rate livable, so that it doesn’t force people out of the country.”
The problem is that that the likes of Rauner and Griffin pay the low capital gains rate on thier labor-produced income (they call it “carried interest”) while the rest of us mopes pay ordinary income rates for income derived from our labor.
Yet despite a marginal tax rate that is less than half of the top marginal tax rate imposed on labor (ordinary inconme), the likes of Rauner and Griffin STILL go to the Cayman Islands and other tax havens to drive down their effective tax rate.
Tax rates would have to go to zero before you got to a point where the likes of Rauner and Griffin didn’t go overseas with their money. That, obviously, won’t work for a civilized society.
Perhaps the likes of Rauner and Griffin feel that they, as job creators, have already contributed to our society so that there should be no need for them to pay taxes in addition to their job creation activities! That the tax rate for people in the category of job creator should be zero.
I swear, I think they actually think that way.
Comment by Concerned Wednesday, Aug 6, 14 @ 11:32 am
i dunno. i’d think if you wanted to be governor of illinois, you’d have invested in illinois and make your assets available for economic growth in… illinois. it’s pretty simple.
i get why people want to get all the tax deductions they can get, but this kind of thing actually requires work to avoid paying taxes. but, then, that’s why we have lawyers and accountants, right?
i’m just not sure how someone who goes to great lengths to avoid paying taxes would be a good leader of any tax-based organization, i mean, government…
Comment by bored now Wednesday, Aug 6, 14 @ 11:55 am
Cute - you linked capital gains with labor wages, then questioned why they aren’t taxed the same.
Because they are not the same.
I say raise the capital gains taxes and then eliminate all corporate taxes. We’d seen a labor boom and market growth, and get capital gains tax increases. Capital gainers would reinvest where there is no corporate taxes, spurring growth further. Win-win.
Comment by VanillaMan Wednesday, Aug 6, 14 @ 12:04 pm
Fortunately, my attention span can still handle 4 and a half minutes so I did watch the whole thing. For what it is, it’s nicely done and I’d give it an A. Now if they can somehow shrink it to 30 seconds, maybe 45 seconds, and get that on TV, they may have something that makes some voters stop and think.
Comment by OldSmoky2 Wednesday, Aug 6, 14 @ 12:23 pm
I didn’t say capital gains and labor wages are the same. My point is that “carried interest” is income derived from one’s efforts (labor), not a return on one’s invested capital, and therefore shouldn’t be treated a capital gains income. But it is becuase the likes of the Rauner and Griffin’s of the country demanded so.
Yet having lowered the tax rate on their labor, they still seek ways to lower their personal tax obligation through means unique to those with great wealth.
My point was that you have to get a tax rate of zero before the likes of Rauner and Griffin would
stop using exotic menas to lower their effective tax rate.
And that doesn’t work for a civilized society.
Vman, I would be happy with the system you suggest so long as there was also an incentive to put the recod amounts of idle cash sitting on corporate balance sheets to work.
Comment by Concerned Wednesday, Aug 6, 14 @ 12:57 pm
nnngggghhhh…oh sorry dozed off.
Comment by Living in Machiaville Wednesday, Aug 6, 14 @ 1:10 pm
Well, I liked it as a simplified explanation that anybody can absorb, if they cared to.
The part that resonated for me was that modern capitalists aren’t putting their capital back to work, back into circulation, any more: they’re just storing up wealth instead of investing in building things, making things, creating things and services - the stuff that drives an economy, makes jobs, leading to more tax revenue and a health budget, etc. The lower classes resent it. A lot. It’s easy to play to that resentment when there are few concrete examples to the contrary.
Comment by Newsclown Wednesday, Aug 6, 14 @ 1:20 pm
I had a college professor who wouldn’t allow us to write a paper more than 3 pages long. He like brevity. Get to the point. 4 plus minutes isn’t getting to the point.
Comment by Demoralized Wednesday, Aug 6, 14 @ 1:32 pm
Oh the shame-Rich folks attempting to maximize capital. Is there no end to their perversions?
Comment by I B Strapped Wednesday, Aug 6, 14 @ 1:53 pm
Again. This Cayman Islands thing has nothing, nothing to do with moving jobs out of state. It’s “moving” only in the sense of filing legal papers, and establishing accounts by computer entry. Often these new “company” or Division sites don’t even have a desk or person attached. It allows one to file different tax returns, and evade or delay some tax payments. Simple as that.
It also has little to do with the tax environment specific to Illinois. It has nothing to do with some “exodus” of jobs and companies from Illinois.
Comment by walker Wednesday, Aug 6, 14 @ 3:36 pm
Walker,
So when the piece talks about capital not being available, that’s mistaken?
Interesting. Perhaps you can expand on that matter.
Comment by Gooner Wednesday, Aug 6, 14 @ 3:40 pm
==So when the piece talks about capital not being available, that’s mistaken?==
Not to speak for Walker, but the availability of capital for investment in Illinois isn’t really affected by which bank you put your money in. Handing your cash to a teller in an Illinois building doesn’t mean the bank will lend or invest the money here at all, or even invest more than will a bank “located” in the Cayman Islands that takes your deposits electronically. The piece is also wrong on the tax matters, at least with regard to the only investments anyone has “found”; that is, the accounts that have been disclosed. As a US citizen and Illinois resident, he has to pay federal and Illinois tax on the earnings from these accounts the same as accounts with an Illinois bank.
Comment by Anon. Wednesday, Aug 6, 14 @ 3:50 pm
Interesting, Anon.
So when he parked his $1 million in a south side credit union, that had no impact on the local credit markets?
It would have been the same if he parked it in the Caymans?
That was all just a show a week or so ago?
Interesting.
Comment by Gooner Wednesday, Aug 6, 14 @ 3:57 pm
Above “This, of course undercuts much of previously accepted, simplistic economic theory.” is what I meant to type. Sorry.
Comment by walker Wednesday, Aug 6, 14 @ 5:20 pm
As to the latest political spin that there are no tax benefits associated with Cayman Islands accounts, “because you have to pay US taxes on all earnings on these accounts,” — that is just laughable. I am amazed the political spinners have the boldness to use that line.
Why do you thing the Cayman banks exist? These accounts are set up entirely for tax benefits. There are at least six ways, off the top, that one can get tax benefits using Cayman Islands accounts, which are not available to the average US taxpayer. If you combine them with moving earnings from other offshore entities, and other banking or insurance systems, there are more.
It’s in no way simple, and we don’t know enough yet to be sure that Rauner took much advantage of any of them, or that he didn’t. People are suspicious in general, and the quicker Rauner stops defending in detail, and changes the subject to Quinn, the better.
Comment by walker Wednesday, Aug 6, 14 @ 5:33 pm