It’s good to be Ken Griffin.
The billionaire hedge fund manager wasn’t thrilled about the idea of paying an additional 3 percent in taxes on his estimated $1.5 billion annual income. To Griffin, the burden of Illinois’s staggering financial crisis should remain squarely on the shoulders of workers.
So, he almost single-handedly bought a state election.
On Tuesday, Illinois voters defeated the Fair Tax amendment, which promised to alter the state constitution so that legislators could legally implement a progressive income tax. Governor J. B. Pritzker had called for a slight increase in the current flat rate of 4.95 percent for the estimated 189,000 taxpayers earning over $250,000 a year.
Pritzker pitched the new tax system as a way to boost the state economy while making it “more fair for working people.” The governor, a billionaire heir to the Hyatt Hotels fortune, even played the role of class traitor by spending $56 million of his own wealth to campaign for it.
Enter Griffin, plutocrat extraordinaire.
The last time two tycoons faced off head-to-head in a Battle of the Billionaires, Donald Trump got the better of Vince McMahon at WrestleMania 23. In Illinois’s electoral version, the Citadel CEO matched Pritzker nearly dollar for dollar and wasn’t afraid to play dirty. He funneled $54 million of his own cash into the public campaign to stop the amendment, much of it through the Coalition to Stop the Proposed Tax Hike Amendment committee.
The PAC’s ads were deceptive and rife with scaremongering. In one TV spot, a senior citizen warned that the amendment would grant politicians new “powers to increase income taxes on anyone, including retirees.” In another disingenuous ad — which PolitiFact generously rated as “half-true” — a narrator intoned that the Fair Tax amendment would boost taxes on “small businesses, farmers, and large employers”
The strategy paid off.
Back in March, almost two-thirds (65 percent) of Illinois residents said they supported the Fair Tax amendment. But the Griffin-funded anti-amendment campaign successfully muddied the waters over the next several months. When I spoke with some of my friends and family in Central Illinois recently, they told me Pritzker was trying to raise everyone’s taxes.
In the end, 55 percent of voters said no to the amendment.
The outlook for non-millionaires appears bleak. Pritzker’s predecessor, former governor Bruce Rauner — also backed by Griffin — left the state’s finances in shambles, with $16.7 billion in unpaid bills, despite shuttering social service agencies and forcing Chicago Public Schools to borrow funds just to keep its doors open. “Illinois is beginning to devolve into something like a banana republic,” noted Politico in 2017.
Now, the state faces the prospect of higher taxes on everyone, more austerity, or both.
“There will be cuts, and they will be painful,” Pritzker warned. “And the worst thing is the same billionaires who lied to you about the ‘Fair Tax’ are more than happy to hurt our public schools.”
Meanwhile, the state is busy turning Chicago into the Las Vegas of the Midwest by rapidly expanding its casino economy. Last year, it doubled down on the Video Gaming Act it passed in 2009 by legalizing sports betting and significantly increasing the number of slot machines. Chicago mayor Lori Lightfoot is planning the city’s first-ever mega-casino.
And as for Griffin? He gets to continue a spending spree big enough to make Donald Trump blush.
Last year, he bought the nation’s most expensive home for $238 million, a 24,000-square-foot New York City penthouse overlooking Central Park. He’s snapped up $590 million in real estate in Chicago, Miami Beach, Palm Beach, London, and — of course — the Hamptons. He’s shelled out a combined $500 million for artwork from Willem de Kooning and Jackson Pollock. And, just for kicks, he handed Chicago’s Museum of Science and Industry $125 million to get his name plastered all over it.
Something is rotten in the Land of Lincoln. The working class and the poor are about to get hit with austerity and regressive taxes in the middle of a devastating pandemic. And the rich? They’re just going to play their get-out-of-taxes-free card.
November 24, 2020 at 07:08AM