Giannoulias, Kirk stay true to political parties on tax issues

Taxes can be a dirty word for one of the country's major political parties.

For the other, a way to level the playing field.

And, true to those allegiances, the two men who want to be Illinois' next U.S. Senator fall mostly along traditional party lines when it comes to taxes.

Republican Congressman Mark Kirk does not support an estate tax and wants to keep the tax cuts that are set to expire in place, while Democrat Alexi Giannoulias supports the estate tax and wants to extend income tax cuts for middle class earners, while letting those for wealthier Americans expire.

It's a topic that's yet again touching back to one of the sore spots for the Giannoulias campaign his part in the failure of his family's Chicago bank and connections that bank had to a felon who worked for impeached Gov. Rod Blagojevich.

This comes as Kirk tries to put more and more distance between he and the issues that have dogged his campaign June revelations that he had an embellished military record.

In a race that rarely stays on topic, as both candidates reach back to the point out these sore spots and connect them to some new topic of debate, it's no surprise that the Republicans and Kirk seized on news that Giannoulias had received a sizable tax break for working for his family's bank at the same time he was campaigning for state treasurer full time.

The apparent incongruence between Giannoulias' platform of a fairer tax system especially for the average Joe and the tax break he received may hurt his campaign, experts say.

"It raises one more concern about the character side. It's not helpful," University of Illinois Springfield political science Professor Kent Redfield said. "And so it's a problem at least for how the Kirk campaign could use it."

The controversy stems from a $2.7 million tax deduction Giannoulias received for losses in his share of the family's now-failed bank, Broadway Bank. Giannoulias got the deduction because he claimed to work at the bank for five of the last 10 years logging 500 hours in 2006.

Giannoulias, news reports pointed out last week, has told voters he was largely gone from the bank by then and was not involved in the bank's spring 2006 loan to convicted fundraiser Antoin "Tony" Rezko.

Giannoulias said Friday "there have been no inconsistencies" in his story. The Chicago Democrat has repeatedly reiterated that he left "day-to-day operations" at the bank in 2005, but formally left in April 2006.

"I continued to close out files and continued to work at the bank as I campaigned for state treasurer," Giannoulias said.

When asked about formal records of his hours logged there, he said he could "see if there's still video cameras of me being in the office."

Giannoulias, currently the state's treasurer, supports extending middle class tax cuts and allowing tax breaks for the wealthiest 2 percent of Americans to expire a plan he says will avert "nearly $1 trillion" in added debt over the next 10 years.

All income, Giannoulias said, should be treated equally no matter how big the paycheck.

Giannoulias said he would work to close corporate tax loopholes that give companies incentives to hold profits overseas.

He says he wants the federal treasury to be better armed to stop the abuse of tax shelters and offshore tax havens, and to help close the gap between taxes owed and taxes paid.

He supports permanently extending the estate tax.

Giannoulias' opponent, 10th District Congressman Mark Kirk, wants to permanently end the estate tax.

Kirk, now finishing his fifth term, touts his votes for President George W. Bush's 2001 and 2003 income tax relief packages, set to expire at the end of the year. He wants to keep those tax breaks permanent.

Giannoulias has criticized Kirk for voting against middle class tax cuts, part of the 2009 recovery act.

The Highland Park Republican defended his vote, saying he did not want to "waste money" on "big government spending."

Kirk said he supports tax relief for "all Americans" and says he voted against raising taxes 40 different times.

Kirk and the Illinois GOP have pounced on news of Giannoulias' personal tax break, calling for the IRS to investigate.

Giannoulias called that a political ploy and accused Kirk of failing to make his tax returns public.

Giannoulias released five years' worth of tax returns in November and released the most recent return in July, spokesman Scott Burnham said.

But Giannoulias is wrong about Kirk not making his returns public, Kirk campaign spokeswoman Kirsten Kukowski said. His tax returns were made available for reporters to view in his office in April and there remains a standing invitation for the media to look at them, she said.

The race for Senate one of the most closely watched races in the country has been dominated largely by mudslinging. Kirk's campaign has painted Giannoulias as a "mob banker" while Giannoulias' has branded Kirk as a "serial embellisher."

In the final stretch of the election, Redfield points out, that's unlikely to stop.

... At this point both of these candidates have significant negatives. Both sides are going to continue to hit each other hard."