The new tax my State Representative Barb Wheeler and retiring State Rep. Mike Tryon won’t come out against–a tax on retirement income–has gotten a boost from the Civil Federation.
The Civic Federation apparently made a pitch for a tax on retirement income over $50,000 yesterday.
While described as a right-of-center organization, my memory is reminding me that it has supported income tax increases in the past.
The details of the pitch are here:
“A tax on retirement income has largely been a third rail in Illinois. Different estimates show that could bring in about $1 billion in new revenue per year. The Civic Federation is recommending that it be progressive – that only those that have retirement income in excess of $50,000 get taxed.”
Laurence Msall points out that all surrounding states tax retirement income.
What he doesn’t point out is that most Illinois citizens aren’t tempted to retire in surrounding states, except maybe Missouri and Kentucky.
Other recommendations of the report include
- Reigning in spending to the tune of $1 billion as the governor has proposed
- Having the state teachers’ retirement system absorb the Chicago teachers’ pension fund and consolidate it into one fund
- A constitutional amendment that would change the pension protection clause and only guarantee retirees benefits that have been accrued – not future benefits as the Supreme Court has ruled it does
“Msall says all of this requires politicians to abandon decisions that are based on re-election,” the article says.
Easy to do if you’re not running for re-election or have not primary opponent.
= = = = =
Tryon’s numbers are
- (217) 782-0432
- (815) 459-6453
Barb Wheeler Wheeler can be contacted at
- (217) 782-1664
- (847) 973-0064
Or one can email her here:wheelsback@aol.com
= = = = =
And, of course, I have an interest in a retirement tax not passes, as I received a state pension of $88,542.54 last year.
So, if a 5% tax were enacted, would I move to Florida to save $2,000 here and gain a big senior Homestead Exemption on our home there?
Maybe.
I suspect that’s the kind of cost-benefit analysis that a lot of McHenry County residents, not to mention those living elsewhere in Illinois, will consider.
Later, remembering I would have to pay tax on the deferred 401(k) and 457 income I am forced to withdraw ever year, I see the incentive to move to Florida would be even greater.
Do you hear that giant sucking sound ?
You will soon.
That’s the sound of even MORE residents and businesses
stampeding out of Illinois before the DEMOCRATS plunder
whatever is left of their life’s savings.
Will the last one out please turn off the lights – energy conservation, you know.
Exactly why should Cal and other people living on pensions that were earned while a civil servant not pay for that as income.
The law is saying tax retirements up to the age of 65- you know – people who are now employed with other jobs- often those who’s pensions are earned on in taxpayer funded positions or military retirement.
And yes, I will be personally impacted by this.
Illinois is turning into a $inkhole.
Does anyone remember how former Gov. Quinn got the votes to raise the income tax?
The pension sentence added to the state constitution on December 15, 1970 has to be repealed in its entirety or endless tax hikes will be the result.
That sentence protected pensions and retiree healthcare for state and local government employees but not taxpayers.
That sentence allowed:
– Unlimited legislative pension benefit hikes to pensions that were already underfunded.
– Unlimited legislative retiree healthcare benefit hikes to retiree healthcare that was already underfunded.
– Unlimited diversion of annual pension fund contributions by the state and many employers (municipal employer contributions to fire & police, state contributions to the 5 state pension funds, etc.) to salary hikes.
– Unlimited salary hikes while pensions and retiree healthcare was already underfunded.
Many local governments receive a good portion of their revenue from state government and sustainable state government or local government was not considered in its entirety while these hikes were occurring.
Collective bargaining hikes do not have to consider is this affordable to the taxpayers and government employer in the long run…do not have to consider employees outside the state…they are done in a cocoon.
Unlimited employee pension pickups by the employer are permissible (does the employer ever “pick up” an employees Social Security contribution?).
It is unfair to the taxpayer, unsustainable, and dysfunctional.
A disaster.
No way did the voters intend to be financially bound like this when they approved the state constitutional rewrite on December 15, 1970.
The sentence is a fraud.
The sentence continues to be marketed by its supporters in a fraudulent fashion without full disclosure of its consequences and ramifications.
The taxpayers were hoodwinked and remain largely clueless.
We have a marketing problem.
Taxpayers have no marketing department.
Unions and governments have marketing departments.
WTTW
Chicago Tonight
Civic Federation: Illinois Needs $9.4 Billion in New Taxes by 2019 to Survive
by Paris Schultz
February 11, 2016
http://chicagotonight.wttw.com/2016/02/11/civic-federation-illinois-needs-94-billion-new-taxes-2019-survive
“The only way out, according to the Civic Federation, is a host of spending cuts, structural changes and massive new taxes.”
Slide on WTTW website titled, $9.4 Billion New Taxes:
– Restore:
— 5% Individual Income Tax
— 7% Corporate Income Tax
– Tax Retirement Income Over $50,000
– Broaden Sales Tax
The article on WTTW website links to a press release on the Civic Federation website, which in turn links to a 55 page report.
Civic Federation
Institute for Illinois’ Fiscal Sustainability
Civic Federation Proposes Comprehensive Plan to Stabilize Illinois Finances by End of FY2019
February 11, 2016
http://www.civicfed.org/press-room/iifs/RoadmapFY2017RELEASE
“The Federation proposes the following recommendations as part of a comprehensive three-year plan:”
1. Limit Spending and Pay Down Bills
2. Revenue Cliff
3. Broaden the Income Tax Base to Include Some Retirement Income
4. Expand the Earned Income Tax Credit to Provide Assistance to Low Income Residents
5. Expand the Sales Tax Base and Reduce the Retailer’s Discount
6. Establish Comprehensive Teachers’ Pension Funding Reform
7. Approve Constitutional Amendment Limiting Pension Protection Clause
8. Make Supplemental Pension Payments
“Unlike FY2015, there are no easy stop-gap fixes such as interfund borrowing or fund sweeps that are available or adequate to close such a large operating shortfall.”
Here is the link to the 55 page report.
Civic Federation
Institute for Illinois’ Fiscal Sustainability
State of Illinois FY 2017 Budget Roadmap:
State of Illinois Budget Overview, Projections and Recommendations for the Governor and the Illinois General
Assembly
February 11, 2016
http://www.civicfed.org/sites/default/files/ReportRoadmapFY2017.pdf
Here is the link to a brief three paragraph article that provides some context to the press release and report.
Civic Federation
Institute for Illinois’ Fiscal Sustainability
State of Illinois FY2017 Budget Roadmap
February 11, 2016
http://www.civicfed.org/iifs/publications/FY2017IllinoisRoadmap
“Prior to the release of the Governor’s annual budget recommendation, the Institute for Illinois’ Fiscal Sustainability at the Civic Federation releases an analysis of the State of Illinois’ fiscal condition.”
Before any tax increase of any kind, install a mandatory workfare requirement to receive Food Stamps(WIC), Medicaid, Section 8 Housing assistance, and any for of welfare.
When I did that in Nunda Township, General Assistance and Emergency Assistance requests dropped to near zero.
Mike Walkup has repeatedly voiced his outrage that I mandated that able bodied welfare recipients actually do some work to receive benefits.
Democrats, like Mike Walkup, believe that government handouts should not carry responsibilities.
The report covers the following three upcoming State of Illinois fiscal years (FY).
FY 2017 (July 1, 2016 – June 30, 2017)
FY 2018 (July 1, 2017 – June 30, 2018)
FY 2019 (July 1, 2018 – June 30, 2019)
So although the Governor and Illinois General Assembly have not agreed on a State budget for FY 2016 (July 1, 2015 – June 30, 2016), planning is still taking place for a FY 2017 budget.
Believing that you can tax your way out of debt/deficit is the logic of Democrats through out America.
If it moves, tax it.
Oh, wait.
If I move Illinois can’t tax my income.
That’s sounds like a plan to me, Cal – I among others are working on it.
Well to be fair all people with government pensions paid by the people of Illinois should only be taxed if they move and don’t support the Illinois economy.
Otherwise, why should we keep financing their retirement.
Private pensions used to be held payable as and asset when a company foreclosed but they changed the law and pensions can be diminished now.
Every law was lobbied for by someone with wealth to make it better for corporations.
Outsourcing took a lot of middle class jobs away.
Cal can’t be for Rauner and no new taxes and also say he wants his pension.
It is time to pay the piper.
Because Inish and karma – the government is totally bloated and spending like drunken sailors.
They DO NOT need any more money.
They need to fix what they have and stop wasting our hard earned dollars.
Period.
When money is tight in your household, what is the very first thing you do?
Common sense, people.
We live in a Federal system, Karma.
I can’t be forced to stay in Illinois and Illinois can’t tax me in Florida.
Why the 50k, if taxes are to be taken, all should pay the same %.
I’d rather they reduce all the gov pensions by 5% and not put a tax on them.
At least then the $$$$ would directly effect the pension system and not get lost in the general fund to buy votes.
Wow, Cal, you’d move based on a mere $2,000 annual income tax on a ridiculously generous and ever-growing pension?
Some of us will work just as hard or likely much harder to contribute to our 401(k)s, which are not tax-free pensions.
Why should pensioners be given a pass when the rest of us will not?
If money is that tight for you, I’m surprised your analysis hasn’t already proven it is outrageous property taxes that would provide the greatest financial advantage by moving Florida.
I appreciate your transparency but your objectivity can certainly be called into question.
I told you so, yup!
Instead of questioning Cal’s objectivity, (BTW who is responsible for this blog?) I question the objectivity of the report.
This quote from the report says it all:
I suspect Mr. MacArthur is rotating at a dizzying pace in his grave based on what his hard earned money is being used for!!
http://www.discoverthenetworks.org/funderprofile.asp?fndid=5223&category=79
Here is what Paul Harvey stated:
“In a similar vein, Harper’s magazine publisher John R. “Rick” MacArthur, son of JRM and grandson of John D. MacArthur, said:
Fair point, Cautious. It is Cal’s blog.
The point I inadequately failed to get across, and that I may again fail to do, is that the position Cal and many other conservative-leaning pensioners comes across as hypocritical.
“We must fix our pension system.”
“Ok, let’s tax those pensions to help pay for a mistake made long ago.”
“Wait, no, that’s not what we mean. Fix it without it affecting me or I may leave.”
It’s sort of like the NIMBY lot.
Regardless, Illinois is far more expensive for retirees and it’s property taxes, not income taxes, that lie at the root of that problem.
It must be fixed.
Somehow.
For a comparable standard of living, I found the tax burden in McHenry is 352% than in Melbourne, FL. It’s 74% more than in Greensboro, NC.
That’s real money without any added value.