August 30th, 2021
PRITZKER “FAIR TAX” AMENDMENT POSES SERIOUS THREAT TO ILL. RETIREES
The proposed so-called “fair tax” amendment to the Illinois Constitution on the November 3 ballot, sponsored by Springfield Democrats and pushed by Ill. Gov. Jay Robert “J. B.” Pritzker, is a threat to the financial well-being of retired Illinois residents, according to a new report by an independent nonpartisan research organization.
If the Pritzker amendment is approved, converting Illinois’ flat-tax income tax to a graduated income tax, “Expect more seniors to leave Illinois looking to avoid retirement tax,” according to the Illinois Policy Institute (IPI).
“There are 2 million Illinoisans of retirement age, and currently the state does not tax their retirement income. But there is significant reason to believe the ‘fair tax’ amendment to the Illinois Constitution would bring retirement taxes if passed,” stated the IPI.
On Oct. 5, three Cook County retirees joined the Illinois Policy Institute in filing a lawsuit over the inaccurate language being presented to voters on the ballot. Among other things, the lawsuit points out that misleading statements mailed to all voters by the Illinois Secretary of State, “will induce retirees into voting to impose on themselves a tax on retirement income.”
Illinois State Treasurer Michael Frerichs in June stated that “[o]ne thing a progressive tax would do is make clear you can have graduated rates when you are taxing retirement income, and, I think that’s something that’s worth discussion.”
According to the IPI, “Pritzker’s head of the Illinois Department of Revenue previously proposed a bill to tax retirees and several prominent amendment backers have admitted passing the progressive tax is the first step to taxing retirement income in Illinois.”
Graduated taxes make it inherently easier to raise taxes on everyone by giving politicians the ability to raise taxes on small segments of the population, one at a time, rather than facing backlash from all taxpayers at once, explains the IPI.
The amendment would enable Springfield to begin taxing retirement income above a certain level at varying rates, gradually lowering income brackets to raise additional revenue by slowly adding more Social Security and pension income to the tax base, states the IPI. The amendment also grants lawmakers the ability to tax retirement income at a different rate than regular income, which could allow for rates to rise over time so the hikes generate less unified public opposition.
“The Springfield Democrats have adopted a ‘divide and conquer’ strategy toward Illinois taxpayers,” said Jim Tobin, economist and president of the Taxpayer Education Foundation (TEF). “They are slicing up the state’s taxpayers into different groups, and pouncing on each group one at a time. That’s why Illinois taxpayers must go to the polls and vote this November 3. If they don’t vote, the Springfield politicians will be justified in ignoring their views.”