117 Comments - chi - Thursday, Oct 22, 15 @ 9:07 am: Anyone have an estimate for how much revenue a tax on retirement earnings at the same rate as regular earnings would bring in annually? - Oswego Willy - Thursday, Oct 22, 15 @ 9:08 am: I get what she’s saying, I even get the rationale… But the Governor has said at least two times publicly “January”, and Leader Radogno points to the “simple majority” too, so… “Ok, now what.” Asked and answered, “moving on”…. - @MisterJayEm - Thursday, Oct 22, 15 @ 9:09 am: Even baby steps towards a negotiated solution are steps towards a negotiated solution. – MrJM - Robert the Bruce - Thursday, Oct 22, 15 @ 9:09 am: ==Anyone have an estimate for how much revenue a tax on retirement earnings at the same rate as regular earnings would bring in annually?== There’s a columnist I read who quoted an estimate of $2B last year. http://www.chicagobusiness.com/article/20140802/ISSUE01/308029973/an-illinois-budget-fix-politicians-wont-touch - Team Sleep - Thursday, Oct 22, 15 @ 9:12 am: My dad - who is further to the right than me - openly wonders why his pension isn’t taxed. That’s saying something. At this point - especially given what Leader Radogno “admitted” during this interview - I’d have to think everything is on the table. - PublicServant - Thursday, Oct 22, 15 @ 9:14 am: What say you, Governor? - Frenchie Mendoza - Thursday, Oct 22, 15 @ 9:15 am: Interesting. And according to a Schoenburg tweet I just saw this morning, Rauner is not pushing right-to-work. At least that’s what he told a reporter. I’m not understanding these changes. My sense was that right-to-work was a core part of Rauner’s agenda. If he’s not pushing it — then … what? - Lincoln Lad - Thursday, Oct 22, 15 @ 9:16 am: Clearly signaling Republican votes for a tax increase, probably at the Gov’s direction. Looks like an effort to get this over with to me. - Langhorne - Thursday, Oct 22, 15 @ 9:17 am: One or more bills to tax retirement income were drafted last spring. But that was before we fully appreciated the governors true agenda. Go ahead and tax my retirement, in order to fund….my retirement. - Elo Kiddies - Thursday, Oct 22, 15 @ 9:18 am: Has she said yet which 15 of her members will be voting for it? - thoughts matter - Thursday, Oct 22, 15 @ 9:19 am: I’m within 5 to 10 years of retirement, and I am ok with retirement income being taxed. Hopefully a certain amount will be exempt. It’s too bad they couldn’t have come to this conclusion in December before they almost destroyed the state. - Team Sleep - Thursday, Oct 22, 15 @ 9:19 am: Frenchie - good question. If he drops the CBA portion of his property tax freeze, then he can tout property tax relief. And, if he can drop both the CBA requests and right-to-work inanity, then maybe tort reform can be a workable solution. Tort reform is equally as important to the business community as worker’s comp - and there are some judicial races in central and southern Illinois that will feature tort reform as big issues. - Aldyth - Thursday, Oct 22, 15 @ 9:21 am: Taxing retirement income above a certain amount would probably go okay with most seniors. - Ducky LaMoore - Thursday, Oct 22, 15 @ 9:22 am: For months she has been talking about the “democrat tax hike.” Maybe she has come to the realization that it is republicans that want the tax hike? Maybe she figured out that it is going to have to be the governor who lays out the vision for a tax hike. Maybe she knows that the democrats don’t particularly want a tax hike, and they especially don’t want to propose one. Maybe… just maybe… she is more serious about governing than I give her credit for… we’ll see…. - Century Club - Thursday, Oct 22, 15 @ 9:25 am: This is good, but for almost 2 years, the rhetoric from Rauner, Trib, et al, has been that a tax increase is unnecessary and goes to fund corruption and waste. There is a long way to walk that back, and it’s still unclear what the Republicans will get that will justify a tax hike to their base. - Lincoln Lad - Thursday, Oct 22, 15 @ 9:27 am: The GOP will frame their support for a tax hike as being dragged there kicking and screaming. That won’t change and should be expected. The question: will the Speaker accept the open door, or slam it shut. Will he cause a positive response from his caucus, or not. - Norseman - Thursday, Oct 22, 15 @ 9:27 am: === “We have to bite the bullet and pay it,” Radogno said. “The payments have to be made. That does put Illinois at a disadvantage.” […] === That bill would have been much lower had it been paid when due. Underfunding the funds to artificially hold down taxes has consequences. - Wordslinger - Thursday, Oct 22, 15 @ 9:28 am: She could have given that interview last Jan. 2. The arithmetic hasn’t changed. There’s one player procrastinating on dealing with reality. And contrary to what he and his peeps say, tne fiscal and governmenal train wreck that is FY16 can’t be fixed until he commits to doing tne job in front of him, not the one he wishes he had. - Oswego Willy - Thursday, Oct 22, 15 @ 9:29 am: ===Has she said yet which 15 of her members will be voting for it?=== LOL. It’s all 20. It’s all 67. Not one GOP Member will be spared. None. Rauner, come January will need 13 HDems, 10 SDems. Make no mistake, the “bargain” that Cullerton and Madigan will require, not ask, require, all 67 “green” It would be utter and complete malpractice if Cullerton and Madigan don’t require all 67 GOP Members to vote for the Rauner Tax Hike. There’s a reason there’s $20 million in Rauner’s account, and not Radogno’s and Durkin’s accounts. The Rauner Tax Hike is one of those reasons. Rauner doesn’t want a $&@#% problem when Rauner uses the 67 as chits. That’s real. Rauner said its so. - Ducky LaMoore - Thursday, Oct 22, 15 @ 9:29 am: ===The question: will the Speaker accept the open door, or slam it shut.=== That depends. Is the GOPGA all signals green on the tax hike? - 360 Degree TurnAround - Thursday, Oct 22, 15 @ 9:30 am: I thought the Republicans were “winning handily”. Now I’m stunned by the position they are in. Is that the fetal position? - Robert the Bruce - Thursday, Oct 22, 15 @ 9:30 am: ==The question: will the Speaker accept the open door, or slam it shut== Great question. Especially in regard to taxing retirement income. I’ll guess he shuts that door. - Lincoln Lad - Thursday, Oct 22, 15 @ 9:30 am: If Radogno wasn’t speaking for the Gov, I’d be shocked. She wouldn’t be the one to break rank. She was doing what she was told to do in my opinion. - Apocalypse Now - Thursday, Oct 22, 15 @ 9:30 am: One of the things keeping retirees in Illinois is no tax on retirement income. It sure isn’t the weather, mountains or beaches. Taxing retirement income will sure help the companies moving people. Illinois has a spending problem, as evidence by the spending increase during the last temporary income tax increase. - SAP - Thursday, Oct 22, 15 @ 9:31 am: It may be a long walk back for the Rauner Caucus to vote for a tax hike, but a journey of a thousand miles begins with a single step. - Langhorne - Thursday, Oct 22, 15 @ 9:32 am: —unclear what repubs will get to justify a tax hike to their base— How about MAP grants, autism, home care for seniors, funding for universities, and so on? - Team Sleep - Thursday, Oct 22, 15 @ 9:33 am: Century - this is just my take, but I would bet that Rauner and his peeps will go into 2018 with the “it was worse than we expected” tagline. And it may work. Tim Nuding has noted that time and again during the transition and in the lead-up to the Governor’s budget address. - Ducky LaMoore - Thursday, Oct 22, 15 @ 9:34 am: === Illinois has a spending problem, as evidence by the spending increase during the last temporary income tax increase. === Huh? You mean, actually funding the pensions? That spending increase? - SAP - Thursday, Oct 22, 15 @ 9:35 am: Yesterday it was Comptroller Munger. Today it is Leader Radogno. Looks like some little cracks forming in the wall. - SAP - Thursday, Oct 22, 15 @ 9:37 am: The spending increase began decades ago. We just paid for it with IOU’s to the pension funds instead of actual dollars. - Frenchie Mendoza - Thursday, Oct 22, 15 @ 9:39 am: All Rauner has to do is get a budget — and move the tax pointer (essentially) back to where it was — and he can (and will) claim victory. He will, as TS points out to above, that it was worse than he expected. Nevermind that he’s the sole cause — along with the gutless GOP GA folks — that caused the current mess. But if he can get a budget and move things back to where they were, he will gladly pretend like he solved a massive crisis. It’s despicable — but I’m certain that’s what will happen. - Demoralized - Thursday, Oct 22, 15 @ 9:40 am: Apocolypse Now You can’t possibly say with a straight face that some sort of revenue increase is not needed to solve the current problem. Only the completely clueless would argue that. - Lincoln Lad - Thursday, Oct 22, 15 @ 9:40 am: If Radogno wasn’t speaking at the Gov’s request, she’ll be walking the statement back. - UIC Guy - Thursday, Oct 22, 15 @ 9:41 am: ‘retirement income’ is going to include withdrawals from those big 401(k) accounts that some rich people have built up. (Mitt Romney’s was worth a million!) That may not go over well in some circles. - Anonymous - Thursday, Oct 22, 15 @ 9:43 am: Does taxing state pensions ‘impair”, ergo no go per Supremes? Or no? - Wordslinger - Thursday, Oct 22, 15 @ 9:43 am: –”…. It was worse than we expected tag line.– That, along with the unchanging arithmetic, also was available on Jan. 2. So much damage done, so much time wasted, but the underlying, unavoidable issues remain. And the problems get worse, and the solutions more painful, every passing day. - Ducky LaMoore - Thursday, Oct 22, 15 @ 9:44 am: @Frenchie You really think status quo antebellum will be good enough for him to “claim victory”? Do you think anyone, with him or against him, will buy that??? - Rich Miller - Thursday, Oct 22, 15 @ 9:45 am: ===status quo antebellum=== That’s a good one. - Ducky LaMoore - Thursday, Oct 22, 15 @ 9:45 am: ===Does taxing state pensions ‘impair”, ergo no go per Supremes? Or no?=== No. - Primary Target - Thursday, Oct 22, 15 @ 9:46 am: “January when only a simple majority is needed” Maybe I am slightly pestimistic (it is October), but this tells me the plan is wait until January when they think enough Dem’s will break and turn on the union. They still believe they will throw the union under the bus to get Rauner’s Turnaround Agenda in order to solve the crisis. Rauner owns that this crisis is now out of control, but comments continue to reinforce he will continue his relentless attempt to break the union, even if it means breaking the state. - Austin Blvd - Thursday, Oct 22, 15 @ 9:46 am: A tax on retirement income is at least a couple of years off since it would require a change in the constitution. This means Radogno would not be doing the heavy lifting. And if there is going to be a constitutional change, why not go for a progressive tax? - Retired - Thursday, Oct 22, 15 @ 9:46 am: Could the argument be made that taxing retirement income, particularly state pensions, would be a reduction of the pension? Just wondering. - X-prof - Thursday, Oct 22, 15 @ 9:47 am: Wouldn’t it be nice if this was the opening of an intelligent public discussion of how best to restructure IL revenue? … Right. It seems I’m not fully awake and out of my dream state. We can’t do all that needs doing with a retirement income tax alone, but as part of a solution, it does partially address a potential generational injustice between older people who benefited from artificially low tax rates throughout their working careers and young people who are just entering the work force and are asked to pay down previous generations’ debt. I still favor a heftier increment in the income tax rate paired with actual cuts, not just a freeze, in property and/or sales tax. With a quarter of the state’s income going to the top 1% and about half to the top 10%, we can no longer afford for these groups to enjoy total state and local tax rates that are only half (or less) the rates that middle and low-income earners bear. This would make needed revenue enhancement much less painful than expected for the majority of tax payers. - Ducky LaMoore - Thursday, Oct 22, 15 @ 9:48 am: ===That’s a good one.=== Yeah, that advanced history class is really paying dividends. LOL. - Rich Miller - Thursday, Oct 22, 15 @ 9:48 am: ===No. === I wouldn’t be too sure. There was a strong passage in that opinion which slammed the idea of putting all the pain on one class (retirees) and not spreading it around to everyone. - Southern Illinois Hoopdee - Thursday, Oct 22, 15 @ 9:48 am: Dems can play the “the current tax system is too regressive that’s why we’re not voting to increase the tax rate in it” card. That dog can definitely hunt. - John Cougar - Thursday, Oct 22, 15 @ 9:48 am: https://www.youtube.com/watch?v=PErUiAyVoGc - Secret Square - Thursday, Oct 22, 15 @ 9:50 am: “One of the things keeping retirees in Illinois is no tax on retirement income. It sure isn’t the weather, mountains or beaches.” Other factors keeping retirees in Illinois might be having family and friends that they want to stay in touch with; NOT having the time, resources, or inclination to move to Florida or some other state that has no income tax; or just wanting to stay in their own home and in familiar surroundings as long as possible. My guess is that any retirees who move out of IL because of a tax on retirement income would most likely be people who were already strongly considering moving anyway. I doubt very much that people who WANT to stay in their community and stay close to family, or who can’t afford to go scope out and buy property in Florida or wherever, are suddenly going to change their minds purely because of the state income tax. - Century Club - Thursday, Oct 22, 15 @ 9:50 am: Langhorne - I don’t disagree, but that would be a steep change in their rhetoric. They themselves have made the tax hike toxic in their own districts and they have framed victory as forcing the Dems to accept Rauner’s Turnaround Agenda. Whatever Madigand gives them on that front will be thin gruel. Sleep - I don’t know what they’ll do. I suppose they have the pension ruling they can point the finger at. I’m just glad I’m not the one who has to write Rauner’s “This is why I’m agreeing to a tax hike” speech. - alabamashake - Thursday, Oct 22, 15 @ 9:51 am: **My sense was that right-to-work was a core part of Rauner’s agenda. If he’s not pushing it — then … what?** Frenchie… where have you been? Rauner publicly gave up on RTW months ago. - Ducky LaMoore - Thursday, Oct 22, 15 @ 9:52 am: ===Could the argument be made that taxing retirement income, particularly state pensions, would be a reduction of the pension? Just wondering.=== Taxation is a constitutionally separate matter entirely. Has nothing to do with the pensions clause or contract law. - SAP - Thursday, Oct 22, 15 @ 9:56 am: Rich: I think taxing all retirement income equally would pass Constitutional muster. Singling out retirement income earned by retirees in state pension funds for taxation looks like a non-starter though. - Lincoln Lad - Thursday, Oct 22, 15 @ 9:57 am: Taxing retirement income would be on all retirement income, not just state employee pensions. It is only a problem politically with seniors, not a constitutional issue. - walker - Thursday, Oct 22, 15 @ 9:59 am: Radogno could always do her numbers. Of the leaders, she’s the one to listen to on budget realities. She should have stuck to the numbers these past months, and let Murphy and Sandack spout the general political talking points. Local RTW was mostly given up on months ago, but bringing it up again publicly might be a good sign. Team Sleep is on it. De-coupling union language from Tax Freeze and it’s done. Further Workers’ Comp movement is more difficult, but also achievable. We’ll see if that’s enough. Unfortunately, where three months ago they could have easily come to a middle-point on spending, it is now a much worse problem, with less time to fix it. What might have been a roughly $2.9B tax increase three months ago might have been forced to 3.5 or higher by these delays and legal orders. - illlinifan - Thursday, Oct 22, 15 @ 10:00 am: A state tax on my retirement won’t be the reason I leave Illinois, it is the property taxes which is so high in the Chicago region. For example a $300k home in Illinois is about $7500 a year. In California that property tax would be about $2000, Arizona about $2400 and Florida about $2700. Illinois needs to tackle this to keep seniors here - SAP - Thursday, Oct 22, 15 @ 10:00 am: ==A tax on retirement income is at least a couple of years off since it would require a change in the constitution.== Not really. The exemption for retirement income is statutory,not Constitutional.. - A Jack - Thursday, Oct 22, 15 @ 10:01 am: I think the retirement tax is fine. I would expect there to be a larger property tax credit for seniors. When you are on a fixed income, that property tax is a big chuck of your income. On CNBC there was a listing of states where retirees move based on total taxes. Illinois ranked 24th, even without a retirement tax, because of the high property taxes. I suspect many seniors object to those property taxes since they no longer have children in the school district. So a large non-refundable property tax credit for retirees would make a retirement income tax credit easier for seniors to swallow. I am also happy Rodango is talking income tax instead of those goofy non-deductable other taxes. I could care less about my state tax rate. It’s those freaking federal taxes which are ridiculous. - Arsenal - Thursday, Oct 22, 15 @ 10:03 am: ==Maybe she has come to the realization that it is republicans that want the tax hike? == No one *wants* a tax hike, but we may *need* it. If we do, we should do it, and not try to leverage it for things we don’t need. If we don’t we should drop it. This is what Rauner has failed to grasp. If it’s the first one, the GA clearly isn’t playing his game. If it’s the second, the GA will be plenty happy to never vote for a tax hike. - X-prof - Thursday, Oct 22, 15 @ 10:06 am: Taxing retirement income would have to mean all retirement income (IRAs, 401(k)s, 403(b)s, public and private pensions/annuities, etc.). It would need to be combined with other forms of revenue enhancement. Otherwise, there are likely legal problems (if, for example, it only applies to pensions of state employees) and basic arithmetic problems (it won’t generate enough new revenue). Assuming those conditions are met, it should be OK legally in my opinion (I’m not a legal expert). - nixit71 - Thursday, Oct 22, 15 @ 10:07 am: ==Taxing retirement income above a certain amount would probably go okay with most seniors.== The problem is not all retirement income is equal. Unlike pension and 401k contributions, taxes have already been paid on Social Security contributions. So if the state implemented a flat tax free threshold on all retirement income, private sector retirees (and public sector ones who paid SS) would be paying more in taxes than public sector retirees. What would make sense would be to make SS benefits non-taxable (most states already do this) and have a low threshold for all other retirement income. I’ve heard $50K floated around, but that seems too high. - Dr. X - Thursday, Oct 22, 15 @ 10:10 am: When does the list of primary challenging Raunerites come out and who gets to run against this JJudas? - jdcolombo - Thursday, Oct 22, 15 @ 10:11 am: As long as both public and private sources of retirement income were treated equally (and similarly to regular wage income), taxing pensions should be constitutional. What the legislature probably cannot do is tax ONLY state pensions and leave other retirement income (e.g., private pensions, 401(k) distributions, etc.) untouched, or tax retirement income at a higher rate (this would violate the constitution’s flat rate requirement, anyway). I will be retiring in the next two years; I’m also fine with taxing retirement income. Most states do, in fact, tax retirement income other than Social Security if they have an income tax (obviously, states without an income tax don’t). Most of those states also have some sort of exemption for small pensions; NY, for example, exempts the first $20,000; around us, Michigan, Missouri, Ohio and Wisconsin have relatively modest exemptions; Kentucky exempts about the first $40,000; Minnesota and Indiana (!) fully tax retirement income. Illinois is the only Midwestern state that fully exempts pension income (as opposed to Social Security, which is exempted by nearly everyone). I don’t know why folks think pension income should be exempt; it is income that was earned as a result of working, but deferred in its payment. If you had instead received the discounted present value of that income as part of your salary, it would have been fully taxable. Instead of thinking of pensions as “special,” we should think more along the lines of “low incomes need tax relief.” If you are poor, you shouldn’t be paying taxes, regardless the source of income. On the other hand, if you have a $30,000 pension and $1 million a year in trust fund income, exempting the pension is crazy. - Austin Blvd - Thursday, Oct 22, 15 @ 10:14 am: Taxing retirement income would pass constitutional muster because it would require a change in the constitution. - Mama - Thursday, Oct 22, 15 @ 10:19 am: “Radogno said lawmakers likely will consider hiking the state income tax or taxing retirement income, rather than increasing the state sales tax or instituting a tax on services.” Why are they dropping state sales tax & taxes on services? - anonlurker - Thursday, Oct 22, 15 @ 10:20 am: @Austin Blvd 10:14 am Plz see SAP comment @ 10:00 am. “…statutory, not Constitutional.” - BtweenMonmouth&Rushville - Thursday, Oct 22, 15 @ 10:22 am: I think OW is correct. It is the plain reality, but it is counter-intuitive, which is why Rauner and the Superstars haven’t understood it — and why everyone on this blog is not saying “Amen.” The Dems don’t want to vote for a tax increase — no politician does. At the end of the day, Madigan and Cullerton can (and will) outlast Rauner’s hostage crisis. To end it, they will force a structured roll call that ensures *all* Repubs vote for a fresh (hah!) FY16 budget (with all of the tax hikes). OW is correct — 13 HDems & 10 SDems are all that will be required to vote for it — the Repubs will all be forced to vote green. That’s it. I know it may sound improbable to those who think Rauner has some master-stroke up his sleeve. But this is the simple, honest, mathematical, political reality. - Mama - Thursday, Oct 22, 15 @ 10:23 am: They can only tax retires who still live in IL. Many retirees have already moved out of state, & many others will move if the State passes an income tax on retirees. Therefore, the revenue they gain won’t be nearly as much as they think. Is it worth taking the chance of opening the Constitution? I don’t trust what Rauner would do to our pension rights if the Constitution is allowed to open for changes. - nixit71 - Thursday, Oct 22, 15 @ 10:27 am: If we don’t tax retirement income, should we even be considering a property tax freeze? The property tax freeze is supposed to offset the impact of an income tax hike. But if you’re retirement income is not taxed, should your property taxes be frozen too? All that would accomplish would be to shift an even higher tax burden to those still working. - Anonymous - Thursday, Oct 22, 15 @ 10:28 am: A tax on retirement income will force me to finally leave this state! No more reasons to stay! - alabamashake - Thursday, Oct 22, 15 @ 10:31 am: **Is it worth taking the chance of opening the Constitution? I don’t trust what Rauner would do to our pension rights if the Constitution is allowed to open for changes.** It doesn’t work that way, unless we’re going to have a new Constitutional Convention, which isn’t going to happen. - anonlurker - Thursday, Oct 22, 15 @ 10:31 am: Mama @ 10:23 =& many others will move if the State passes an income tax on retirees.= Some perhaps, not sure about many. I certainly don’t know how you could quantify it. Radogno stated that the rate would have to be lower than other states to dissuade peeps from moving. That would leave only a handful of states to go to. I wouldn’t be willing to move to any of those. BTW, I’m retired and living out of state and am taxed at a higher rate than Illinois. - Earnest - Thursday, Oct 22, 15 @ 10:33 am: If taxes are a big motivator in people moving out of the state, are they also a factor for moving people into the state. If so, our flat tax must be a massive motivator for people with high incomes. They are probably moving in to the state in droves, since their taxes would be lower here than in surrounding states. Minority Leader Ragdono is a big believer in human services. Whatever she’s allowed to say publicly, that’s got to figure into her motivation. - Tone - Thursday, Oct 22, 15 @ 10:36 am: Earnest, I’m not sure it’s drawing higher earners in State, however our taxes are driving middle income people out of state. And more and more taxes are not going to help a state that is already losing population. - DuPage - Thursday, Oct 22, 15 @ 10:36 am: Careful where you lead your line-dance, Radogno, you are getting kind of close to stepping on that “third rail”. - Oswego Willy - Thursday, Oct 22, 15 @ 10:36 am: (Tips cap to - BtweenMonmouth&Rushville -) I do root for the GOP GA; it’s up to them to move beyond being chits so they aren’t just 67 colored lights… with the colors chosen by Rauner. And independently and stand-alone partnership with the Executive is what Caucuses of the same party should want. It also helps when giving sound advice to the Executive. I think of Pate’s “Gorillas” as a pretty good “example”, but that had a different cost/benefit ration Rauner can’t stomach. - walker - Thursday, Oct 22, 15 @ 10:38 am: The final deal will require Rauner’s strong public support, and will come with a demand for all GOP votes in the House and Senate. However, when push comes to shove on the day, a couple might be allowed to sit and pout, or walk, rather than kill the deal. To require absolute unanimity in the GOP caucus would give too much power to our own “Chicken Little Freedom Caucus.” - One of Three Puppets - Thursday, Oct 22, 15 @ 10:39 am: The voter propensity for retirees is just a weee bit high. Raise their taxes at your own peril GOP. If one voting block is more inclined to vote for you, it likely is this the post 60 crowd….. - Sad Cubs fan - Thursday, Oct 22, 15 @ 10:47 am: I would not be convinced at all that a tax on government pensions would be considered constitutional. When employees were given a pension, it was a tax-free pension; it is not a terrible argument at all to view this as a diminishment. I’m not saying that the Supreme Court would not let it fly, I am only saying it’s not a slam dunk by any measure. Not even close. - Chicago Cynic - Thursday, Oct 22, 15 @ 10:52 am: Wow. It really surprises me that Rodogno is so far off the reservation. She’s right of course. Encouraging to see her say this out loud. Strikes me that a message is being sent. - Norseman - Thursday, Oct 22, 15 @ 10:56 am: PLEASE PAY ATTENTION. THEY ARE NOT GOING TO LIMIT A RETIREMENT TAX TO GOVERNMENT PENSIONS! The Solons may be obtuse, but their not stupid. SO STOP AND THINK BEFORE YOU POST! - Norseman - Thursday, Oct 22, 15 @ 10:56 am: Oops - “they’re” - Oswego Willy - Thursday, Oct 22, 15 @ 10:58 am: - walker - Respectfully, I think Cullerton and Madigan will give Rauner 10 Dem Senate names and 13 Dem House names and will tell Rauner; “It’s up to you now to get the GOP to lift the rest… or it fails” It’s the cost Rauner will be required to pay, or it fails. Plus Rauner will sign the Rauner Budget, tied to the Rauner Tax Increase. Respectfully, - walker -. - BtweenMonmouth&Rushville - Thursday, Oct 22, 15 @ 11:03 am: I understand, appreciate and respect your allegiances, OW. While I don’t share your loyalties, I respect your political chops and agree with how this will play out. FWIW, I’m not at all gleeful about what’s coming…it didn’t have to be this way. Rauner’s hostage-taking is cruel, harmful to the process, and destructive to people and good institutions. But it looks like Rauner’s Party will be forced to pay the price. You’re right — the Repubs have (and have had) a choices here. But it requires guts to tell Rauner and his money “No” (along with, yes, some creative coalition bargaining with the Dems). Apparently there has been an unwillingness to do what must be done…I think you would agree, for their own good (not for Rauner’s). Alas, eventually Rauner will “get” all this and take the Dem’s deal (the only one on the table). - walker - Thursday, Oct 22, 15 @ 11:09 am: OW: Agree that will be the going-in deal, and what is said to Rauner. Just don’t be surprised if on the day it comes out slightly differently. - Oswego Willy - Thursday, Oct 22, 15 @ 11:14 am: - walker -, if there’s one thing we all know that follow the GA, until the lights on the board are lit and put in the record, the trust in the structured roll call is all the 177 members have in the chambers, lol - BtweenMonmouth&Rushville -, as I respect your take, and your allegiances as well, if I knew them better. Thanks for the props, best of luck. - Robert the 1st - Thursday, Oct 22, 15 @ 11:18 am: I’m so confused. For years I’ve been reading here that income and business tax hikes have very little effect on businesses coming to or leaving a state. Now about half the comments seem to believe that taxing retirement income will cause an exodus of retirees. So which is it? Taxes scare off capital or not? Seems many today are supporting the Laffer curve. Too funny. - Lincoln Lad - Thursday, Oct 22, 15 @ 11:23 am: So is Radogno breaking rank or opening the door at the Gov’s request? I’d love to be in the Gov’s inner circle today and know for sure. Are we near positive movement or digging a deeper hole? - tnt - Thursday, Oct 22, 15 @ 11:25 am: == it’s possible Chicago representatives could force Democratic leaders to the negotiating table…Radogno said.” There it is again, more GOP speculation (or is it fantasizing?) about a Rauner-Chicago alliance forming in the General Assembly. Have they deluded themselves into thinking Rahm is going to get Chicago-based House members to flip on Madigan, or do they think ILGO-funded primary challenges are going to frighten them into capitulation? - Oswego Willy - Thursday, Oct 22, 15 @ 11:27 am: - tnt - I think it’s a lil of both; “Ken Dunkins” that the IllinoisGO will mold into Raunerites, and Rauner trying (again, ugh) the triangulation of Madigan with Rahm. Funny thing is, both are farther away than January. - Wordslinger - Thursday, Oct 22, 15 @ 11:28 am: CC, who says she’s off the reservation? Check out the headline up top. The heat is getting turned up on the boss. I’d liken Rauner’s “We’re winning” comments the other day to Kevin Bacon’s “All is well” during the homecoming parade. - Mostly Harmless - Thursday, Oct 22, 15 @ 11:34 am: I wonder if Rauner is letting right-to-work quiet down while he waits to see what happens in Friedrichs vs. California Teachers Association at SCOTUS. That ruling could gut public sector unions without Rauner having to lift a finger. - BtweenMonmouth&Rushville - Thursday, Oct 22, 15 @ 11:38 am: OW: Political ID is tricky. PoliSci’s once said that family and region dictated life-long ID, and that prob. still applies to me. I’m not originally of Illinois, so I’d hate for labels to get lost in translation. We’d have to drink a beer or two to sort it all out. Anyway, I appreciate where you’re coming from. All the best, OW. - BtweenMonmouth&Rushville - Thursday, Oct 22, 15 @ 11:41 am: oops, better: PoliScis - UIC Guy - Thursday, Oct 22, 15 @ 11:41 am: OW: ==Plus Rauner will sign the Rauner Budget, tied to the Rauner Tax Increase.== I hope you’re right, but if what’s happened so far (and what is wholly predictable, given what’s happened so far) has not led BVR to back down, why are so sure that he will at some point? What do you think will happen that will finally make the difference? —I don’t mean these questions snarkily: I hope there are good answers, and I’d like to know what they are. - Oswego Willy - Thursday, Oct 22, 15 @ 11:52 am: - BtweenMonmouth&Rushville -, you never know, but thanks for your thoughtful follow up. - UIC Guy - The reason January is awful and necessary is the 60/30 dynamic is back. That’s sorta “good news” if you are heartless to the next 70 days of damage. Also, with petitions handed in, and the primary season shaken out to “who is where”, all sides will want all the bad votes behind them ASAP, especially those facing primary. Rauner will want his IllinoisGO to have something too, so January, some 70+ days away is a “positive”, to what end, I can’t accurately see the erratic Rauner thought process thru the inevitable ending, and it’s gonna come down to a vote or votes, that we all know. I didn’t help, I know, but uncharted waters are difficult to navigate, even when knowing the final destination. - UIC Guy - Thursday, Oct 22, 15 @ 12:00 pm: Thanks, OW. I get it about Jan. 1st. But Rauner shows no sign of agreeing to anything without changes to Union laws that are not going to happen. He can veto. Even if he doesn’t, it takes a majority, and the Dems will want them mostly to be Reps and the Reps show no sign of being willing. So what’s the end-game? 1. Does Rauner back down (contrary to what I just said), perhaps with face-saving changes, e.g. to workman’s comp.? or 2. Do the requisite number of GA members get together to override his veto? (And who are they? The Dems will want them to be mostly Reps, but is that going to happen?) or 3. what am I missing? (Rauner resigns? Is recalled?) I’d be interested in your thoughts (others too). - Norseman - Thursday, Oct 22, 15 @ 12:11 pm: === So what’s the end-game? === UIC, that’s the $64,000 question. You can lay out a multitude of “what if’s,” but the end-game is up to one man. All I know for sure is that there will be a lot of people whose lives have been damaged for the cause of Rauner’s anti-union initiatives. - thechampaignlife - Thursday, Oct 22, 15 @ 12:16 pm: Ideally, a tax one retirement income would be Roth-style: you pay when you contribute, withdrawals are tax-free. That takes all burden off current retirees (bypassing the retiree exodus issue) and current workers can lower their contribution 3.75% to afford the tax. I’m not sure how the numbers would shake out but there might also be more revenue from current workers’ contributions than retirees’ withdrawals. This also captures the revenue where it was earned so retiring to Florida does not cost us income tax revenue. - Oswego Willy - Thursday, Oct 22, 15 @ 12:17 pm: - Norseman - That’s where I’m at too. My above comment; “I can’t accurately see the erratic Rauner thought process thru the inevitable ending, and it’s gonna come down to a vote or votes, that we all know.” - UIC Guy - I humbly appreciate that you are interested in my thoughts. I learn here all the time from others, so I look to read everyone’s take to try to game things in my noodle. The only thing 100% for sure I know is #3; there will be no resignation or “R” or “I” of Rauner. None of thise will happened. Period. You ask the big questions, but gauging Rauner, that’s a riddle wrapped in… … you get the drift. - Dilemma - Thursday, Oct 22, 15 @ 12:22 pm: @jdcolombo ==I will be retiring in the next two years== You will be missed. I loved your classes. - Buzzie - Thursday, Oct 22, 15 @ 12:25 pm: Most public sector retirees would not relocate if their pensions are taxed because their pensions are too small to allow for such an action. However, that group of retirees who do receive a high pension (and whom those pension tax advocates will point to as the basis for the tax) can afford to move out-of-state and many will thereby leaving the heavy lifting to those individuals who truly can’t afford it. - Mouthy - Thursday, Oct 22, 15 @ 12:32 pm: Team Sleep - Thursday, Oct 22, 15 @ 9:12 am: My dad - who is further to the right than me - openly wonders why his pension isn’t taxed. That’s saying something. At this point - especially given what Leader Radogno “admitted” during this interview - I’d have to think everything is on the table. My mom said that there’s no way anybody’s gonna tax her pension she just told me from her grave. But being a compromiser and not just looking out for my own pension why not tax pensions over the 100K level? I won’t get there to about age 172… - RNUG - Thursday, Oct 22, 15 @ 1:41 pm: == Anyone have an estimate for how much revenue a tax on retirement earnings at the same rate as regular earnings would bring in annually? == Last year I ran some numbers with the assumption that the first about $22K (average SS) to $32K (average pension) would not be taxed. I used numbers like income, social security, house value, household size & age. etc. from the federal census and IL Dept of Revenue since there was no individual source to try to capture all the retirement income. Assumed they would also get the normal IL exemptions. Under that assumption, at the 5% rate (not the current 3.75%), I came up with between about $1.5B and $1.8B from taxing retirees. - AnonymousOne - Thursday, Oct 22, 15 @ 2:01 pm: Given that most thinking retirees planned for X number of dollars per year to live on for the duration of their lives; given that they relinquished their capability to earn money; given that they will not be receiving bonuses or raises (at least not comparable to what most people receive at their jobs); given that it’s very difficult to find someone to offer you employment in your 60s, 70’s and 80’s……..is this a good place to look for revenue? Understood that many states do tax retirement income. However, if Illinois workers approaching retirement age KNEW that their income would be taxed, it might actually change some thinking and planning. That is something current Illinois retirees did not plan for as of now. - RNUG - Thursday, Oct 22, 15 @ 2:03 pm: == Is it worth taking the chance of opening the Constitution? ==- 1) extending the current flat tax to retirement income does NOT require a change to the state constitution. 2) even if it did, it would be a single bill with a single topic change to the constitution. It would not be opening up a Constitutional Convention where everything is potentially on the table. Note; You’re going to have to do that single bill to the voters if you try to implement term limits or a progressive tax. - Austin Blvd - Thursday, Oct 22, 15 @ 2:07 pm: SAP and anonlurker- Mea culpa. Thanks. - RNUG - Thursday, Oct 22, 15 @ 2:09 pm: == Now about half the comments seem to believe that taxing retirement income will cause an exodus of retirees. == After you retire, a lot of retirees take a look at moving somewhere else with better climate, tax environment, culture, etc. There are lots of magazines dedicated to helping retirees make such choices. The major things keeping retirees in Illinois are inertia and community (family & friends). Most of us take a second look at moving after our parents die. Change the tax environment and Illinois loses one of it’s advantages for retaining retirees. - AnonymousOne - Thursday, Oct 22, 15 @ 2:13 pm: Taxing our retirement income would make all the difference in the world for us. We are in Illinois because of it. Our kids live in surrounding states which do tax retirement. What’s the difference if I pay tax on it in Illinois or somewhere else? If I’m there, at least I’m closer to them. - RNUG - Thursday, Oct 22, 15 @ 2:16 pm: I agree that ALL the GOP votes will be on the budget and tax bills. I don’t think Rauner, even with his campaign contribution cash hanging over their heads, will be able to get ALL the votes on demand. It’s going to be interesting to see what else Rauner is going to have to come up with to purchase a few of the GOP vote holdouts. - peanut - Thursday, Oct 22, 15 @ 2:39 pm: Over 30 years of retirement, with SS, IRA, 401k and the pension taxed at 5% would be about $150,000. Hmnn. I do like the political entertainment and five months of snow and ice in Illinois, but that cost does make me think. What were those other states that don’t tax retirees? - Beaner - Thursday, Oct 22, 15 @ 2:53 pm: rauner minority leader in the Senate Ragdongo sees taxing retirement income as the solution. So reducing from $200 million to $2 million as the point at which the maximum Casino gaming tax rate of 50% kicks in is off the table, not up for discussion. Increasing the top Casino Gaming tax rate from 50% to 60% is also off the table. So Ragdongo cares more about Casinos than funding schools and would rather tax old peoples retirement annuities than the DesPlaines Casino which pulls in a haul of more than $400 million a year. Got it. - Enviro - Thursday, Oct 22, 15 @ 3:14 pm: ==Radogno said lawmakers likely will consider hiking the state income tax or taxing retirement income…== Finally, they will consider an income tax increase and a tax on retirement income. Do it now and stop kicking the can down the road. Let’s not put this burden on our children and grandchildren at some future time. - Team Sleep - Thursday, Oct 22, 15 @ 3:53 pm: I still say there is no way that McCarter, Duffy, Ives, Morrison, Breen, Andersson and maybe a couple of wild cards (Wehrli?) vote in favor of ANY tax increases. Why on earth would McCarter ever support it? Even if Rauner asked “pretty please - with sugar on top”, Rauner also got behind Shimkus and did so very publicly. - Oswego Willy - Thursday, Oct 22, 15 @ 4:19 pm: ===It’s going to be interesting to see what else Rauner is going to have to come up with to purchase a few of the GOP vote holdouts.=== I think that’s where the “arm twistin’ and proddin’…” Are gonna have to come into play for Rauner. That FY2015 proved it can be done. - Team Sleep -, The freight for Rauner is the 67 chits, like with the FY2015 Fix. Madigan, “That’s not my concern ‘Chief’, you need your 47, just like the FY2015 Fix” Then, the $&@#% problem speech will have its teeth. - Anonymiss - Thursday, Oct 22, 15 @ 4:47 pm: Wait, whoa. There’s still a Pioneer Press? - Blue dog dem - Thursday, Oct 22, 15 @ 8:35 pm: Finally dialogue I can live with!,,, - Anonymous - Friday, Oct 23, 15 @ 8:21 am: My governor campaigned on not taxing seniors (we vote) Sorry, comments for this post are now closed.