Analysis: Illinois retirees could pay $3 billion in state income taxes under Pritzker graduated tax hike plan
Gov. J.B. Pritzker
ORGANIZATIONS IN THIS STORYIllinois Governor J.B. Pritzker
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DONATEHelp support the Metric Foundation’s mission to restore community based news.DonateBy LGIS News ServiceOct 8, 2020
Illinois’ 1.95 million retirees could pay as much as $3.07 billion in state income taxes if voters approve Gov. J.B. Pritzker’s graduated tax hike amendment on Nov. 3, according to an analysis by Prairie State Wire.
The analysis calculates the total state income tax that would be paid if Illinois retirees were required to pay tax rates between 4.7 and 9.3 percent on their income.
The median state income tax across 50 states is 4.7 percent. Non retiree Illinoisans currently pay 4.95 percent; Pritzker is promising to raise those rates significantly, however.
According to the U.S. Census, Illinois is home to approximately 745,000 senior retiree households, headed by someone over age 65. They currently pay no state income tax on Social Security or pension income.
While Pritzker said the tax hike is aimed at the rich, it can be applied to any demographic, including retirees.
“The definition of ‘rich retirees’ is fluid,” Illinois Policy reported. “Retirement taxes even have been discussed for those making $15,000.”
In fact, retirees are taxed in all 32 states that have a progressive tax.
Pritzker says his proposal, which would amend the Illinois State Constitution to allow state leaders to pass unlimited state income tax rates on people by class, job or location, is intended to massively increase tax revenue to fund higher salaries and richer pensions to public employees.
He expects higher income taxes to fund a 25 percent increase in the annual state budget– an increase of $10 billion in state income taxes paid, and spending, per year..
Currently, state income tax hikes must be paid by all taxpayers and cannot be limited to specific groups, like small business owners or retirees.
