The competing campaigns for governor are thinking about the Cayman Islands – not as a vacation spot, but how to make the other man’s holdings there look bad. Republican challenger Bruce Rauner’s campaign has said the financial connections he has to the Caymans, a notorious tax shelter, have no impact on his personal tax rate. Incumbent Gov. Pat Quinn’s camp says otherwise– and trotted out an Ohio State University expert to bolster the case.
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“When most people in financial markets think about the Cayman Islands, they think (of them) as a place to hide their money,” says a YouTube video produced by economist Michael Brandl, who says he is volunteering his time and talents. “When there is a capital gain in a private equity transaction, that is going to be subject to a capital gains tax,” he continues. He says that tax could be as high as 28 percent in Illinois, compared to zero for the Cayman Islands.
The Quinn campaign’s implication is that Rauner is using a legal – albeit detrimental to Illinois – means to reduce his tax bill. Brandl would not go so far as to say this is a deciding factor for voters.
The Rauner campaign was quick to fire back that the state’s public pension funds –of which Quinn is a member – also have offshore dealings, and perhaps the governor can think about that. However, pension funds do not pay income taxes, no matter where they’re located.