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Millionaire tax vote opens door to new clash over Chicago wealth

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When Illinois Governor JB Pritzker sought to boost the state income tax on the rich at the height of the pandemic, Ken Griffin used his fortune to torpedo the initiative. 

The billionaire financier still quit the state for Florida two years later. Now, a handful of Illinois politicians are once again eyeing a new tax on the highest earners — a move that risks alienating the state’s wealthiest residents, including in cash-strapped Chicago. 

Next week, Illinois voters will weigh in on a proposed extra levy of 3% on annual incomes of more than $1 million, with the proceeds going to ease property taxes. The ballot measure is nonbinding, but approval would potentially open the door to a new debate after the failure of Pritzker’s 2020 plan, which called for raising state income tax rates on higher earners. 

pritzker-jb-illinois-governor.jpg
Illinois Governor J.B. Pritzker

Joshua Lott/Photographer: Joshua Lott/Getty

“This time around we don’t have Ken Griffin to protect us anymore,” said Dan Rahill, a wealth strategist at Chicago-based Wintrust Wealth Management, predicting that higher taxes would prompt more Illinois residents to consider establishing residency in nearby Wisconsin or Indiana. Or Florida. 

The latest tax vote will unfold amid a tumultuous budget season in Chicago, where Mayor Brandon Johnson is feuding with the city council and the public-school system over yawning fiscal shortfalls. Johnson proposed a $300 million property-tax hike this week, breaking a campaign promise, saying the increase was needed to close the city’s budget deficit of almost $1 billion.

At the same time, local leaders have increasingly been looking to the city’s wealthy to plug budget gaps, even as both Chicago and Illinois contend with persistent population declines and corporate departures. 

Backers of this year’s proposal say taxing millionaires would bring relief to everyday homeowners struggling to pay Illinois’s notorious property levies. Based on property taxes paid as a percentage of home values, the burden on people in Illinois is the highest in the country except New Jersey, according to the nonpartisan Tax Foundation. The ballot measure would raise about $4.5 billion, according to a preliminary estimate by the Illinois Department of Revenue. 

“This referendum is the first time where people have a specific chance to lay out a plan that can give relief to broad numbers of everyday folks,” said Pat Quinn, a former Illinois governor who’s spearheading the proposal. 

The measure has backing from two of Quinn’s fellow Illinois Democrats, Rep. Danny Davis and Chuy Garcia. Pritzker, also a Democrat, said he believed in a graduated income tax system as the ideal method to lower property taxes in Illinois but said the referendum could be popular with voters.

“We all believe in lowering property taxes in the state of Illinois,” Pritzker said at a press conference in September. “So I can see that it might be one that is popular among people, but as far as I’m concerned, a graduated income tax is the way to go.”

Two other Chicago billionaires, Pat Ryan and Sam Zell, contributed to the 2020 fight against Pritzker’s approach, but Griffin made the largest donations by far. He spent about $50 million on the effort before ditching Chicago two years later and moving to Miami. 

Griffin’s Citadel empire was one in a string of companies leaving the Chicago area including Caterpillar Inc. and Boeing Co. amid rising concerns over public safety, regulation and taxes.

The data is mixed on whether high-tax environments really push wealthy people to move to other states, said Chris Berry, a property-tax expert at the University of Chicago. But a more straightforward approach to easing the burden of property taxes would be to rein in local government spending that’s “out of control,” he said. 

“Only in Illinois will you find politicians who think the way to cure runaway taxes is by creating yet another new tax,” Berry said.

Population decline

The state population fell by more than 87,000 in 2022, which translates to a loss of $9.8 billion in adjusted gross income, according to the Internal Revenue Service. Adding that to declines from the four years before that, the five-year outflow totaled $41.7 billion.

Since the tax measure on the November ballot is nonbinding, it may never have any practical effect. But few issues galvanize Illinois residents, and especially Chicagoans, more than property taxes. And the pressure on local-government revenue is likely to rise.

After the city’s south suburbs saw a substantial jump in property taxes this summer, Cook County Assessor Fritz Kaegi proposed “circuit-breaker” legislation, suggesting that the state find a funding source to provide some sort of relief for low-income homeowners who get a sharp increase in property taxes. 

Quinn, the former governor, said the ballot measure he supports could work in concert with Kaegi’s circuit breaker proposal — and both could be funded by the millionaire tax. 

“If you want to emphasize homeownership as a positive thing for our society and our economy, then you don’t want to have a property tax burden that is excessive,” Quinn said. “We need to do something about it, rather than just complain about it.” 

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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