It took them a little while, but soon after the passage of the new federal tax law, Chicago Cubs’ millionaires are starting to give up their second homes in Palm Beach, Fla., and Richmond, Va., and start shopping for another.
But there’s no hard sell. They’re well-intentioned tycoons of the highest order who aren’t looking to bulk up their portfolios at the expense of millions of average Americans. They just simply don’t see the merit in the law.
“If they really cared about economics, they wouldn’t be in Chicago,” said John Topping, president of Topping & Associates, a wealth management firm in Chicago, who served for 10 years on the National Board of Directors of the Chicago Association of Realtors. “It’s a community with super-low taxes and high quality of life. It’s really about pleasure.”
Another main reason the millionaires are staying put is because they haven’t been hit hard by the new tax law. That’s because many middle-class Americans with substantial assets and wages were taken advantage of by the outgoing administration — when federal taxes on dividends and capital gains were slashed to 21 percent and 15 percent, respectively.
The new tax law will result in higher taxes on many billionaires like Hall of Fame pitcher Greg Maddux and former Cubs stars Billy Williams and Ryne Sandberg. In Palm Beach, celebrities were hit the hardest. Last year, 15,695 affluent residents, including three of its 100 richest people, opted to buy a second home in Palm Beach and listed the homes at an average price of $3.6 million, according to New York Times data. Even more wealthy people were hurt in Richmond, where seven home sellers were seeking an average price of $2.4 million.
A few percentage points off of what they paid last year is just not enough to warrant selling a home you live in and commute to work in every day, according to Michelle Frey, of Frey Real Estate Group.
“I’ve heard from clients who don’t want to move and live in Palm Beach. Maybe they have to turn a couple of percent down, but in their minds, they won’t miss the return,” she said. “We’ve had agents tell me that the new tax laws seem irrelevant to us. These are the best jobs in the world, but there’s no way we’re going to spend the extra time to sell a $30 million house in Palm Beach just to save a little money on our taxes. It’s laughable.”
The nine-time NL MVP Michael Jordan purchased a home in Chicago in 1993, shortly after his retirement from the Bulls and in the wake of a wave of Americans fleeing the city. He hasn’t been seen at the country club in years, but he’s still close to home. His MJ’s Restaurants and Michael Jordan’s Stadium concessions company are headquartered in nearby Kenosha, where there is no state income tax. His sprawling mansion is on 25 acres and took about two years to build; the value of the property could reach as high as $36 million, according to Zillow.
“The state tax rate right now is just too high,” he told the Times. “Going forward, hopefully we’ll look at it as if we go through this recession like this, maybe next year we can look at it.”
The same goes for Cliff Geller, the former Trump supporter who “boasted that he did not owe the IRS a penny,” The Chicago Tribune reported last year. Geller and his wife are the two richest residents of Palm Beach and part of an “exclusive group that has not filed federal income tax returns in several years.” Another of the eight Jell-O-eating millionaires, Bill Wirtz, ignored his billionaire label by “roasting and singing bluegrass music,” a poolside article in The Palm Beach Post proclaimed last year.
Finally, the sheriff of Palm Beach said that now, when people vacation with Jay-Z, they’re given an escort by an “accomplice.”
The high percentage of millionaires who have purchased new homes in Palm Beach and Richmond, Va., is too hard to ignore.
“Do I think there’s a sense of an end of an era? Absolutely,” Topping said. “The fact that this has been the same for 50 years and the richest 85 percent of people have had these tax breaks for almost that long, I think it’s frustrating to the economy that we got back in the