One of Illinois’ largest newspapers said voters need to pass the progressive tax amendment in 2020 so that the state can start taxing rich people's retirement income.
The Chicago Sun-Times Editorial Board’s Friday piece in support for Gov. J.B. Pritzker’s Fair Tax ballot initiative says the governor’s progressive income tax would set the stage for far greater tax fairness and that “that tax should be expanded to include the highest retirement incomes.”
The newspaper's editorial board counted the nonpartisan Civic Federation and the Civic Committee of the Commercial Club, a center-right nonprofit, and the progressive Center for Tax and Budget Accountability as supporters of a tax on retirement income.
“As the Baby Boomer generation ages, retirement income will grow faster than wages, forcing younger workers to shoulder an increasingly unjust tax burden,” the Sun-Times wrote. “So let’s get on with it and do right by the young people of Illinois. They didn’t create this pension mess. Those of us with a little gray in our hair did.”
Illinois is one of three states that imposes an income tax, but does not tax retirement or pension income.
While a growing number of organizations have voiced interest in supporting a retirement tax, the premise remains unpopular with Illinois politicians seeking re-election.
“It puts an unfair burden on people who are retired who have not had the opportunity to plan for that,” said Ryan Gruenenfelder, AARP Illinois director of advocacy and outreach, on the topic of taxing retirement income over a certain amount.
Gruenenfelder hadn’t read the Sun-Times editorial.
There has yet to be any proposals filed in the 101st General Assembly that would include any type of taxation on retirement income, only resolutions opposing it from previous sessions.
Adding a tax on retirement income, no matter what income level, after a successful Fair Tax Amendment in 2020, could subject it to the same criticism as a progressive income tax.
“It always trickles down,” said Jason Heffley, spokesman for Ideas Illinois, a nonprofit group created to fight the progressive tax push. “Whether it’s income taxes or retirement taxes, unfortunately, every politician seems to believe that raising taxes is the only solution to every problem they face.”
Both Heffley and Gruenenfelder said a retiree with means would easily be able to move, if not simply establish residency, in a more tax-friendly jurisdiction. The editorial board, and others, have disputed that as anecdotal.
“So any way you cut it, we believe, it’s just a matter of time before Illinois has no choice on this issue,” the editorial board said. “The question is where do you start: Retirement income of $250,000 and up? $200,000? $100,000?”