Proposed 'privilege tax' bill called 'a hot stick in the eyes' of Illinois businesses
Mark Glennon, the founder of Wirepoints, sees House Bill 4293 as being representative of everything wrong with Illinois’ faltering national reputation.
“I doubt the bill would become law as long as (Bruce) Rauner is governor,” Glennon told the West Cook News of the bill that would impose a 20 percent tax on fees based on capital gains. “However, this kind of open contempt for job creators is out of control. This bill and similarly buffoonery get lots of national attention and sends out a horrible signal that’s killing us.”
Glennon said that as the so-called “privilege tax” bill, sponsored by Rep. Emanuel Chris Welch (D-Hillside), is currently written, the hit on those in the hedge fund, private equity and venture capital industries would be so severe it figures to push those firms toward the exits, decimating the state’s financial and tech communities perhaps to the point of insolvency.
“You have to count it as yet another instance of Illinois jabbing a hot stick into the eyes of the business community,” Glennon said. “That damage is huge, but immeasurable because we’ll never know how many firms don’t even consider moving into Illinois.”
Glennon said he believes Democrats are pushing for the measure in a desperate attempt to cancel out the “carried interest” tax break at the federal level.
“That’s a loophole that indeed should be closed,” he said. “But you just can’t do it at the state level because financial managers would quickly flee to other states. Progressives are also fond of populist jabs at evil, rich vulture capitalists and hedge fund managers. But in fact, they are singling out an entire sector that includes many firms large and small doing essential work. It’s quack demagoguery.”
Glennon said the only reasonable alternative he sees is for the state to adopt a completely different attitude where the financial industry is concerned.
“Financial managers are among the few golden geese we have,” he said. “They are among the few sectors thriving and growing jobs, but they already are thinking about leaving. We should be doing all we can to welcome and assist them and all job creators.”