When the late U.S. Sen. Paul Simon held public office, he made it a practice to release his full federal and state income-tax returns every year so people could see where he made his money.
To say this frugal and perfectly proper gentleman was scrupulous in reporting his income puts it mildly. The guy even reported as taxable income the few dollars in rebates he was paid for using his Discover credit card. He didn’t have to do that.
Then there was his stock portfolio. Simon wasn’t a big investor, but he made it a practice to buy a small (way less than 100) number of shares in companies whose business practices he admired.
Some of the companies paid dividends, and Simon, a lifetime politician who worked his way up from the state legislature to the U.S. Senate, dutifully reported them. He did have to do that.
Because he was keeping no secrets, Simon’s tax returns were more peculiar than newsworthy, interesting because of what they said about him.
He really reported his credit card rebates as income? He owns six shares in the XYZ Co.?
What’s with this guy?
For starters, Simon was an honest man who was not only totally averse to cutting corners but willing to go the extra mile to reassure the public of his devotion to personal integrity.
More important, Simon was well off but certainly not a rich man, at least by the standard of his times and certainly not by today’s standards. His tax returns were neither complicated to put together nor understand.
That’s not the way it is for today’s ultra-rich public servants.
Former Gov. Bruce Rauner is a self-made multi-multimillionaire. Current Gov. J.B. Pritzker, a scion of family wealth, is a multi-billionaire. He’s so rich that the $170 million in personal money he spent getting elected governor is mere pocket change.
Pritzker released income figures this week from his 2018 federal and state tax returns. He didn’t come close to releasing his full tax returns because he, understandably, figures it’s private, and he doesn’t want people nosing around in all the details of his financial life.
Rauner felt the same way, as did Chris Kennedy, who released income figures but not his income-tax returns during his unsuccessful run for the Democratic Party’s nomination for governor in 2018.
Suffice it to say, understanding Pritzker’s finances would be complicated at best, even if he released his entire federal and state income-tax returns. So it’s impossible to gain a full understanding of them after his release of a few summary pages.
Forbes magazine recently reported Pritzker has a net worth of $3.4 billion, but Pritzker reported 2018 income of $5.5 million to the Internal Revenue Service. If he was getting a 10 percent return on his net worth, Pritzker would have received $340 million.
So even allowing for illiquid assets, including his multiple mansions, Pritzker’s $5.5 million income represents less than a 1 percent return on his total assets.
Here’s another peculiarity. His campaign reported that Pritzker family trusts in 2018 paid $5.3 million in state taxes and $29 million in federal taxes. So his trusts paid a combined $34.3 million in taxes while he reports $5.5 million in income.
Get this. Pritzker reported the maximum allowable capital loss of $3,000. Gov. Moneybags had a capital loss? Whoa, wouldn’t his Schedule D — capital gains and losses — be interesting to examine?
Pritzker’s total federal income tax owed was $2 million plus, but his total federal tax payments were $4.5 million, just $1 million short of his $5.5 million income.
Here’s another weird item — Pritzker was fined $19,144 by the state for underpaying his estimated taxes even though he was entitled to a $399,000 refund. That’s a neat trick — underpaying estimated taxes to the point of being assessed penalties while overpaying.
Pritzker applied that refund to his 2019 state taxes.
So what’s up with Pritzker’s tax returns, which speak volumes but in a whisper so low they can’t be heard?
The guy’s rich, rich, rich. He’s got more money than God. Beyond that, it’s too complicated for mere mortals to understand.