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* Press release…
Biss for Illinois campaign manager, Abby Witt, released the following statement in response to J.B. Pritzker’s latest ad announcing his support for a progressive income tax.
“It’s great to hear a billionaire talk about a progressive income tax, but actions that live up to those words would be even better. This summer, when asked if he supports taking action in Illinois to close a tax loophole that hedge fund billionaires use to avoid paying their fair share, J.B. said no. That’s the same thing he said when asked to pay his full property taxes last year, instead gaming the system for a big tax break.
“Daniel has been fighting for a progressive income tax for years, publicly supporting proposals by his colleagues in the Senate and introducing his own proposed amendment this summer. He passed the first bill in the nation to close the carried interest tax loophole, which would provide much needed revenue for Illinois.
“J.B. might be spending millions to do it, but talk is still cheap.”
Background
“Pritzker says he’ll fight to pass progressive income tax in new TV ad” [Capitol Fax, 9/26/17]
“For J.B. Pritzker, mansion’s disrepair has saved $230K in taxes” [Chicago Sun-Times, 5/18/17]
“Governor candidate Biss is a traitor, say private-equity investors” [Crain’s Chicago Business, 6/17/17]
* Biss is right about Pritzker’s position on the closing the state loophole, but the billionaire does favor federal action…
If the Biss bill becomes law, it would impose for the first time a state tax of 20 percent on Illinois private-equity firms, as well as venture and hedge fund firms, for the investment gains they achieve for clients. That would drive investment firms out of the state, O’Hara says. An Illinois Department of Revenue analysis suggests she may be right. It predicts $1.7 billion in additional revenue the first year, but a wash in later years as firms leave or reclassify income.
J.B. Pritzker agrees that Illinois firms might flee, and take jobs with them. “I favor a federal law to close the carried interest loophole nationally, which would create an even playing field across states and ensure Illinois is not disadvantaged in drawing investment capital to our state,” he says in a statement.
…Adding… From the Pritzker campaign, which points out that the candidate has been pushing a graduated income tax since Day One of his campaign…
April 2017: At His Campaign Kickoff, Pritzker Told Reporters That We Needed To “Start With The Millionaires And Billionaires And Make Sure That They’re Paying Taxes First.” “At his kickoff event, Pritzker told reporters, ‘I think that we ought to start with the millionaires and billionaires and make sure that they’re paying taxes first, and then we’re not going to be talking about raising taxes on middle-class families until we take care of that problem.’” [Chicago Tribune, 4/6/17]
HEADLINE: “Pritzker Says State Needs Progressive Tax Structure” [State Journal-Register, 4/17/17]
May 2017: Pritzker Called For A Progressive Income Tax That Would Require Wealthier People To Pay More. “Instead, Pritzker’s proposing a progressive income tax structure that would require wealthier residents and corporations to pay more.” [Peoria Public Radio, 5/26/17]
June 2017: Pritzker Called For A Progressive Income Tax So That We Weren’t Putting The Burden On Working Families. PRITZKER: “Well, we need to start with a progressive income tax in this state. People who can afford to pay should be the first ones who step up to the plate. We shouldn’t be putting the burden upon working families, and middle-class families, and people striving to get to the middle-class, before we ask people who can afford to pay to step up to the plate.” [Morning Shift, WBEZ, 6/14/17]
July 2017: Pritzker: “We’ve Got To Make Sure We’ve Got A Progressive Income Tax In This State.” “‘Well, we’ve got to make sure we’ve got a progressive income tax in this state so that people could afford to pay a higher rate due,’ Pritzker said. ‘And people in the middle class, striving to get to the middle class don’t get burdened by higher taxes.’” [Fox Illinois, 7/4/17]
July 2017: When Asked If They Supported A Progressive Income Tax, All Six Gubernatorial Candidates Raised Their Hands. “When asked by moderator Brandis Friedman, of WTTW’s Chicago Tonight, who supported a ‘progressive’ income tax, all six men raised their hands. Each also said they supported raising the state’s minimum wage and working to fund public schools before charter schools.” [Chicago Sun-Times, 7/14/17]
August 2017: Pritzker Talked With The Democratic Women Of Kendall County About A Progressive Income Tax. “The pair addressed an event hosted by the Democratic Women of Kendall County, a relatively new organization formed in April, at the UAW Local 145 hall… During his address, Pritzker focused on issues such as implementing a progressive income tax to give property tax relief to residents, improving funding for education and social services, and legalizing marijuana. Pritzker said he favors a progressive income tax, in which those who make more money pay a higher income tax rate, to help fund schools and offset the property tax burden.” [Kendall County Now, 8/16/17]
September 2017: JB Pritzker To Macomb County: “We’re One Of The Few States Left That Still Has A Flat Tax. It’s Antiquated, It’s Unfair And It’s Regressive.” “Pritzker outlined some points needing to be addressed to solve the state’s financial challenges. He encourages a progressive income tax. ‘We’re one of the few states left that still has a flat tax system. It’s antiquated, it’s unfair and it’s regressive. But we have a challenge because it’s written into the constitution,’ he said. ‘We can overcome that in two distinct ways. The first is to elect enough state representatives and senators to get it done. He need 71 votes in the House and 36 in the Senate. We don’t have enough in the House for sure.’” [McDonough County Voice, 9/27/17]
posted by Rich Miller
Wednesday, Sep 27, 17 @ 9:55 am
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Pritzker’s idea sounds better, if it could actually happen. I don’t know if he’s being sincere or if it is just a good dodge though. With federal Republicans looking at how big of a tax cut businesses deserve it sounds unlikely anytime soon.
Comment by Perrid Wednesday, Sep 27, 17 @ 9:58 am
Seems state-level action here would just be a long-term net negative. A fund isn’t that hard to re-locate.
Comment by OneMan Wednesday, Sep 27, 17 @ 9:58 am
Biss is wrong. A federal solution makes far greater sense. If Biss wins the election, he would likely reverse himself of this position, as he reversed himself on his choice for Lt. Gov.
Comment by carlosrosaforgov Wednesday, Sep 27, 17 @ 10:04 am
The primary tax advantage is that the fund manager is taxed at capital gains rates on what is arguably compensation for personal services normally taxable at the much higher ordinary rates. This is not an issue in IL since there is no preferential capital gains rate. All income is taxed at the flat 4.95% rate. Why would we want to tax a bunch of wealthy taxpayers out of town to solve a perceived federal tax loophole?
Comment by The one Wednesday, Sep 27, 17 @ 10:17 am
Should have stuck with the property tax dodge. I’m all for closing the hedge fund loophole, but that just muddies the water here, and I doubt resonates with voters.
Honestly, does Biss think he can beat someone with JB’s money and institutional support by splitting hairs on tax policy (progressive income tax v. hedge fund loophole) or health care (public option v. medicare for all). Or calling him a billionaire?
Comment by Century Club Wednesday, Sep 27, 17 @ 10:25 am
And the Democratic in-fighting finally begins! Pass the popcorn, please. Can’t wait for the “whose more of a Madigan-flunky” attack.
Comment by Deft Wing Wednesday, Sep 27, 17 @ 10:27 am
==Why would we want to tax a bunch of wealthy taxpayers out of town to solve a perceived federal tax loophole?==
Because in Bissematics Class, you are taught 20% * $0 > 4.95% * $10,000,000
Comment by City Zen Wednesday, Sep 27, 17 @ 10:29 am
It needs to be federal like a financial tranactions tax.But Trump wants to cut pass through rates when more. This is a staggering loophole nearly 500 billion to just the top 1 percent.
Comment by David Wednesday, Sep 27, 17 @ 10:39 am
More capital in our state means more jobs. In his plea for the Bernie crowd, Biss ignores Econ 101. So this is both wrong and pretty weak sauce.
Comment by Anon0091 Wednesday, Sep 27, 17 @ 10:59 am
Biss apparently thinks there is a wall around Illinois so our businesses can’t leave. Does he really believe Illinois hedge fund managers would gladly pay higher taxes than New York or London?
Comment by Lucky Pierre Wednesday, Sep 27, 17 @ 11:01 am
These entities are not job creator’s but they sure create a ton of money at the top and Pritzgers plan gets Illinois more of it.
Comment by David Wednesday, Sep 27, 17 @ 11:13 am
As The One pointed out, the investment fund loophole is federal, and has no Illinois income tax effects. Shouldn’t we be focusing on our own problems, and not trying to solve the federal government’s problems for it? Anyway, the bill hits a lot more than the loophole it is supposedly targeting, and is likely a violation of the Illinois constitutional prohibition against a second income tax. So it addresses a problem that does not exist for Illinois, is poorly crafted, and is unconstitutional, but it’s a great press pop to hit JB for not supporting it!
Comment by Whatever Wednesday, Sep 27, 17 @ 11:20 am
Elitist Dan Biss waging war against his own peers and is very disingenuous. Born in a wealthy family of privilege and academia elite just doesn’t fit the bill.
Comment by BissDiss Wednesday, Sep 27, 17 @ 11:28 am
The corollary to the “I’m JB Pritzker, and I approve Daniel Biss’ message” meme (which still makes me laugh) is that every one in a while Biss has to move his message to the left to say, “No, you don’t!”
Comment by Arsenal Wednesday, Sep 27, 17 @ 11:37 am
Hey BissDiss - how many screen names do you use to push this silly argument that Biss a rich elitist?
Comment by JoeMaddon Wednesday, Sep 27, 17 @ 11:46 am
The whole subject of progressive income taxes will be decided by Mike Madigan. He probably isn’t in the mood right now to consider a change in the Illinois state constitution given the recent soda tax debacle…. Daniel Biss and JB can talk and talk about it but nothing is going to happen unless Mike Madigan wants a vote on it.
Comment by Steve Wednesday, Sep 27, 17 @ 12:25 pm
All of JB’s statement’s were from after he started running for statewide office. I’m curious what his position was before that.
Comment by SweetLou86 Wednesday, Sep 27, 17 @ 4:23 pm
The characterization of the Biss legislation as somehow addressing a “state” loophole is completely inaccurate. All Illinois income of individuals is taxed at the same rate, 4.95%, no matter how the income is characterized and taxed for federal income tax purposes.
The Biss legislation is a cynical populist ploy to pander to the uninformed. The legislation as drafted is likely unconstitutional as an improper attempt to enact a second income tax on a particular income stream. The legislation as drafted, and as amended, is also technically deficient in an unsuccessful attempt to work around the apparent constitutional infirmities.
Biss is a smart guy and he knows, or should know, that his legislation is flawed both on technical and policy grounds. But, the legislation, which is a multistate effort of the American Federation of Teachers, and the Chicago Teachers Union in Illinois is a way in which Mr. Biss can attempt to curry favor with the CTU, so he appears to have given into the urge to pander at the expense of sound policy.
Comment by Just the facts Wednesday, Sep 27, 17 @ 4:58 pm
The proposed legislation stipulates that the new tax could only be effective if Connecticut, New Jersey and New York also enact laws having an identical effect, so that substantially mitigates the concern about firms fleeing the state for comparable financial centers. It’s not structured as a tax on income, by the way, but rather as a privilege tax on certain types of legal entities conducting an investment management business, so it has at least been designed not to run afoul of the Illinois Constitution. Whether one thinks it’s a good idea to go after the money that is untaxed as ordinary income at the Federal level is another question; but if Willie Sutton were around to answer, it would surely strike him as a logical thing to do.
Comment by Anon Wednesday, Sep 27, 17 @ 8:27 pm