For the record, I'm not a Ken Griffin fan.
Correct me if I'm wrong, but my understanding is that he got rich mostly by using the questionable trading tactics discussed in Michael Lewis's book, Flash Boys.
Those guys made money simply by getting in between other people's trades. The small investor got ripped off, and the money went into people like Griffin's pocket.
It's a scummy way to make money. It's not real business building. You're not creating value. You're just stealing, but it's not against the law.
So now billionaire Griffin is throwing $20 million to fight the Illinois Fair Tax.
To me, that's classic Griffin. The current flax tax system transfers wealth to people like Griffin by letting them pay less than they should pay in a sensible tax system.
It's a pocket picking just like the high-performance traders picked the pockets of main street investors.
At least, Griffin is logically consistent in his consistent support of all things pocket picking. I will give him that.
Some people don't dislike Griffin. He paid for some bike pass overpass thing in Chicago. He gives some money to art museums (although I had heard a rumor that he has veto rights on what gets exhibited).
But thugs and thieves and narco drug lords are always trying to buy legitimacy. Ponzi-schemer Bernie Madoff was a big nonprofit donor. The Sacklers, whose unethical opiod peddling has led to so many deaths, were big donors.
Just because you are a giver doesn't mean you're not a taker. Grififin is a taker, and his fighting the Fair Tax just shows what his brand is really all about.
From The Heart of Darkness to the Heart of the Discussion
Not liking the guy doesn't mean I wouldn't listen to any reasonable arguments he had against the Illinois Fair Tax, but I suspect it will be more of the same gibberish coming from the usual suspects.
They are going to argue that the Illinois Fair Tax is bad for business, that it's bad for Illinois small businesses. It's not, and it's not.
Let's start with something that's worth understanding: businesses already are dodging their tax obligations in a big way.
At the federal level, only 7 percent of 2019 total US tax revenue came from corporations, according to data from the Congressional Budget Office (CBO).
Most tax receipts come instead from individuals, in the form of personal income and payroll taxes. In 2019, the CBO data indicates that those two sources accounted for 86% of federal tax revenue.
For all you read about US GDP and the strength of our businesses, you might think there'd be more tax revenue from corporations.
You'd be wrong.
Businesses, large and small, are very good at not paying taxes. With all the loopholes, it's child's play to get a company's federal income taxes down to zero or even to a negative number.
For corporate tax folks, things like offshoring income, gaming net operating losses, accelerating depreciation and historic loopholes like safe harbor leasing making getting to zero about as hard as solving a Friday New York Times crossword. (I'm not suggesting Fridays are easy, but, with practice, you get there.)
All of this federal tax avoidance trickles down to hurt Illinoisans. Here's why.
At the state level, Illinois business tax collections are based on the company's federal income tax.
Companies that pay no federal income tax get a free pass on Illinois tax.
Suppose somebody says this to you: "The Fair Tax will hurt business owners. They are already paying business taxes, and now you are going to pass the Fair Tax. It's too much!"
Start your response by saying "Um, no, most of them don't pay anything in business taxes," and let them know that two-thirds of Illinois businesses don't pay any Illinois taxes, according to a study by statewide business groups.
Ironically, the two business groups used the data to suggest that the state should go easy on businesses because 95% of those non-paying businesses had no federal tax income.
Woe is them!
The reality is that zero federal tax income is infinitely more likely to mean you excel at tax avoidance, rather than suggesting your business is struggling.
A study by ITEP found that 60 of the nation's biggest corporations didn't pay a dime in federal income taxes in 2018 on a collective $79 billion in profits.
$79 billion in profits and no taxes! When was the last year you paid no taxes?
Some of the struggling companies that pay no federal taxes?
Netflix, Amazon, Chevron, Delta Airlines, Eli Lilly, General Motors, Gannett, Goodyear Tire and Rubber, Halliburton, IBM, Jetblue Airways, Principal Financial, Salesforce.com, US Steel, and Whirlpool.
Let's just be clear on what's going on here.
When businesses figure out how to avoid taxes, who has to pick up the tab?
Your income tax, sales tax and property tax all have to go up because these companies are gaming the system.
So, before you have a lot of angst about what impact of the Illinois Fair Tax on business is, you might ask yourself: why the heck am I protecting these people?
They are picking your pocket, yet you protect them. Does that make sense?
It's Small Business Too
You might be thinking "Hey, you're talking about big companies that are shirking their duties to fund things we all desperately need. But what about the small business owner?"
Listen, I own a small business, so I know that small businesses play the same games that Amazon and Netflix play to pay no taxes. There are not as many levers to press, because only big companies can buy tax code changes, but there are still levers.
Believe me, small businesses are working hard to push their tax burden your way.
They may smile at you when you pick up the order, but, come tax time, they avoid taxes better than you can, and you have to pay more as a result.
But What About Jobs?
I mentioned above that individuals, not businesses, have to pay the lion's share of the taxes that power our economy.
A good debater would counter that the businesses create the jobs that pay the individuals who pay the taxes. So, in effect, they are paying all of the taxes.
That's just stupid. Businesses are just collections of people working together to conduct business. A business is an amalgamation of individuals.
So, when you say that businesses pay all the taxes indirectly, you're really just saying that the people who work in this world pay all the taxes, which is what I said. Thank you.
We, humanity, are business. We, humanity, are government. And both of those things only get corrupted when somebody works to take advantage of everyone else -- like when people try to convince you to vote against the Illinois Fair Tax, even if a no vote is a vote against what's best for you and everyone you know.
If They Win, You Lose
Right now, as we speak lobbying organizations that represent the worst elements of small and large businesses (a very small minority of that population, mind you) are working very hard to make sure the Illinois Fair Tax doesn't pass.
You are their target patsy.
You are the mark, the sucker who they want to co-opt into voting against your own interests, so you will have to pick up their tab.
In tax battles, what's good for business is bad for citizens. What business don't pay, citizens have to pay.
What's good for the wealthy is also bad for citizens who are less fortunate. When the wealthy don't pay enough, the burden falls on the less fortunate.
We are talking you, your mom, your brother, your neighbor. -- all paying more than they should.
What About Pass-Through Income, Subchapter S, Partnership LLCs and Schedule C Businesses?
I've talked above about how little businesses do for the state of Illinois with respect to funding the government, and how the bill for their shirking lands on your doorstep.
I've focused on companies that avoided paying corporate taxes. Many of you may know that not every business formally files for and pays corporate taxes. Many business owners avoid paying corporate taxes by choosing a legal formation or making certain elections that allow the business money, either profit or loss, to run straight to their individual income tax.
This is where people who are worried about the Illinois Fair Tax business impact focus because the Fair Tax impacts individual income tax. So if a business owner is pulling $500,000 out of his business, his taxes will go up. True. Over $250,000, in fact. Play all the games you can to minimize your taxes and if you are over $250,000 in income, you are going to pay more.
Here's the thing.
Very, very, very few business owners pull $250,000 or more out of their business. Federally, just two percent of households make more than $250,000, but that includes high paid consulting employees, people who made money on stocks and such, and, basically, just lots of non-business owners.
Roughly 10 percent of people in the US earn business income, so if even if we assume half of that elite two percent, the folks that makes over $250,000, are business owners, you'd be talking about just ten percent of business owners making that much money -- but in fact the numbers are way lower than that: only about two percent of business owners make over $250,000.
So, if you are worried about small business owners and how they will survive if the Illinois Fair Tax passes, you might find comfort in the fact that 98% of Illinois business owners will get a tax break or pay the same rate as they paid previously if the Illinois Fair Tax passes.
That's right. Most small business are actually very small. According to the US Small Business Administration's Office of Advocacy, 81% of small businesses are nonemployers, meaning they have no employees. Very few businesses owners make over $250,000, and so the Illinois Fair Tax is good for small business owners, or at least for 98 percent of them.
Two percent of businesses will pay more, but they can afford to. Notice this important pattern of the Illinois Fair Tax. It asks people who can afford to pay more to pay more.
The current flat tax system asks people who cannot afford to pay more to pay more.
On what planet does that make any sense?
You can ask a kindergartener if it makes sense to have a person who can't afford to pay more pay more than another person who can afford to pay more -- and they will get the right answer. No, it makes no sense at all.
Especially for Struggling Small Businesses During Covid Times
The Illinois Fair Tax is going to make it easier not only for 98 percent of business owners, but it's also going to make things easier on their employees.
If you own a business and your employees pay less in taxes, you can in theory pay them less in wages. As a business owner, you can take more money home. You're probably not making over $250,000, so it's a win for you all around.
What else happens when those employees of yours have a little more money in their pocket because of the Illinois Fair Tax?
They spend it. They eat out. They buy flowers for the wife. That money goes into the economy, into small businesses like yours.
You know what happens when a wealthy person gets a tax break? You might think "Oh, they spend it to, but on nicer things, like a Porsche or a Rolex."
No, they don't. Not at all.
They put it into the stock market. They've already got enough stuff or enough extra money to buy stuff. They don't spend more.
As such, when the wealthy get a pas on taxes, it does nothing for the economy. And the Illinois flat tax is exactly that -- a pass on taxes for the wealthy, a policy that keeps money in their pocket and takes it out of the Average Joe's.
Then there's the small businesses that really are not making it. I've been there.
Especially now, during Covid, this is a hard time for businesses.
If you want to help businesses, which passing the Illinois Fair Tax does, there has never been a better time for it than now.
The opposition to the Illinois Fair Tax would have you believe the opposite, as in "Things are tough now, don't change the tax system now."
No, this is exactly the time when struggling business owners need relief. If you keep the Illinois flat tax in place, you are punishing 98% of business owners and nearly 100% of their employees.
During Covid. Seriously, you're not going to give them tax relief now? It's unconscionable.
The mind games people are trying to play on you with this Illinos Fair Tax are crazy.
Every single argument they make is just wrong.
They want you to vote against your own interests, and our state's interests.
They are twisting logic to get you to think that it's bad for you to get a tax break, that it's bad for small business owners to get a tax break, and that it's bad for small business employees to get a tax break.
Think about past cons we fell prey to. The Reagan tax cuts for the rich were supposed to "trickle down" to the rest of us. It didn't work. Experts now widely accept the fact that trickle-down economics don't work. They don't work for the reasons I've discussed above. The money doesn't go into the economy.
What about the Trump tax cuts for wealthy that were supposed to make America great again? I am at the point in my life where I benefitted from them, but the people who needed help got next to nothing. It was a massive pocket-picking program, spun to be something good for everyone when in fact the wealthy did 100X better.
Opponents to the Illinois Fair Tax are running the same con again -- and for the same reason. The Illinois flat tax is a sham tax system, designed to overburden everyone but the top 3% of taxpayers, so that 3% of wealthy Illinoisans can do what exactly? They get more wealthy. Hooray (no, Boo).
You're not a patsy or a sucker.
Don't get conned.
If you want to help small business owners, if you want to help the Illinois economy, the best way for you to contribute is to vote for the Illinois Fair Tax.
And get two of your friends to vote for it while you are at it.
This is a once-every-fifteen-years vote, the stakes are high, and it's going to be close.
We may lose.
If so, schools, education, social services, infrastructure, environmental programs and more will be gutted. Utterly gutted.
Our chances of finally not being so reliant on regressive sales tax and property taxes will be vaporized. Gone. That means higher sales tax, higher property tax, and math that makes it look like we are a high-tax state when we are not.
The suffering that we are experiencing in Covid will multiply tenfold.
The finances of the state will struggle more, and the reputation of the state will swirl into a downward spiral.
You might not like Pritzker. You might not like Madigan. You might thing spending is wasteful. You might be annoyed with the pension situation.
That's not what the vote is about. It's about what is the proper way for a modern state to tax people. It's very clear that a graduated tax, the system the Illinois Fair Tax advocates for, is superior. It's fair, whereas a flat tax is not.
The earth is round. Climate change is happening. Vaccines are a good thing. Flat tax systems are bad. Two plus two is four. These are just truths. They should no longer be up for debate.
So speak up on this issue and punch Yes on this important ballot initiative.
Believe it or not, I'm a pro-business person, just not the kind of businesses that wheedle people out of their money and take advantage of others. Not to name any names.
While it's true that we don't have Ken Griffin's billions, we can vote, and we can do what's right for Illinois.
And even if you don't love this amazing state, as I do, 97% of you will get a tax break or no increase from this.
So, if we are so inclined, our greed, like Ken Griffin's greed, can tell us how to vote.
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