Older people tend to be more stable in their residences (i.e. they stay in one place longer) and are more likely to own their residence (so as to see the annual property tax bill, with its line by line of how much they’re paying to each local unit of government). Those 2 things inspire some degree of higher registration and voting participation.
Maybe another reason why they vote in the numbers they do is because they pay more attention to issues and have the wisdom to assess them. My kids don’t know half of what’s going on—too busy with office politics of their own, their kids, their vacation time. These things seem to come together in focus better with age and the time and wisdom it affords you. It’d be nice if young people paid attention but I think it’s asking too much.
That’s cool. I’ve been planning on moving for a while. I don’t see much of a huge benefit for being on the hook for baby boomer financial malfeasance when they refuse to be part of the solution.
The proportion of the vote for each cohort rises with age. So 19-24 year olds constituted only 7% of the vote, while those older than 64 constitued 26%, more than one in four. What legislative candidate in a tough primary would want to alienate one in four voters by voting to tax their pensions and Social Security??
LOL — Forgive me, I thought there might be less snark from the audience of a blog that discuses declining population and changing economic factors. But seriously, y’all are short 8 billion dollars from this hokey FY 17 budget nonsense, y’all didn’t even pass a FY 16 budget, and if y’all don’t increase taxes you’re going to need to cut almost all of your non-education discretionary spending and some of your K-12 education spending too.
But taxing retirement income? Nah. Can’t do that. Never mind that seniors in the state enjoy the lowest level of poverty, that more than half of the benefits to that tax expenditure go to households earning over 75k, and that things like the pension debt and deferred capital maintenance literally represent services received by folks decades ago that weren’t completely paid for.
We’ll just cut those folks out of the income tax base. Let em run out on the bills and ask younger Illinoisans to pay more for their college education and ask them to pay higher tax rates to pay for services their parents and grand parents received.
That’s a heck of a way to run a civil society, right?
Why would seniors NOT have the lowest poverty rate? ! In my day, I was raised to save for my retirement! Save for the potential catastrophic illness! Save to pay the nursing home bills so that my children aren’t saddled with debt from end of my life! What would the benefits be to our society if every senior were destitute? Hello? Shouldn’t you have some money stashed for these problems after a life of work?
It’s starting to feel like the state is sleepwalking into completely avoidable terminal decline. Chicago can always concoct another tax . . . . . the state of Illinois, between political gridlock, arbitrary constitutional limits and cowardice, cannot.
And (and I wish the posts supported bolding here or something) . . . Why is it that we continue to allow a standard IRA to be converted into a Roth free of Illinois tax? That’s double-dipping by any standard. And unique among the 50 states.
Do younger people want to forego the potential inheritance awaiting them by having their parents pay higher taxes? One reason besides saving for the problems aging brings is to hopefully leave a few dollars to your descendants. Or do young people not want that?
I’m a Baby Boomer and I take offense at being held responsible for the fiscal problems facing Illinois. I have supported candidates and politicians who have supported tax increases. That hasn’t always made for great conversations with friends and family.
I worked in government. I made my displeasure with waste and especially patronage known and I’m sure it didn’t help my career.
Lumping all baby boomers together is simplistic. Taxing retirement income to completely solve our fiscal problems is simplistic.
– Shouldn’t you have some money stashed for these problems after a life of work? –
These days it’s near impossible to save. The price of everything is up and it’s all most people can do to get by. The older generations really don’t get this and browbeat my generation with quotes like this. You’re not unique. My own mother and mother in law haven’t the slightest idea how much the world has changed since they had us. It’s orders of magnitude more expensive and wages have been flat since the seventies.
The state might start taxing conversions of standard IRAs into Roth. We’re the only income tax state that neither taxes retirement income nor taxes IRA conversions. By any standard that’s double dipping on a deduction. And indicative of how unwilling we seem to be to face up to our financial problems as a state.
=Boomers:”I got mine, pffft to the rest of you”= Amen brother. I saved money for my son to go to college, so he wouldn’t have any debt. After 2 years, he quit college and is stocking shelves at at a big box store. Expect the wife and I will use his remaining funds in Europe.
–Do younger people want to forego the potential inheritance awaiting them by having their parents pay higher taxes?–
Do you really believe there will be anything left for the next generation? I don’t. It’s not going to be anything like the greatest generations transference to the boomers.
And the newer older folks I know who were apathetic in the past now are watching elections and voting.
Although sound public policy arguments exit (see Anon, 10:31am), the main driver in my older crowd is basic existentialism. Deteriorating health, increasing health costs, home repairs, car repairs and no back-stop for private retirement savings will render a fairly unanimous result on anyone advocating increased taxes without a clear plan for funamental change and the leaders in the state assembly unmistakenly signaling overwhelming approval.
Certainly, a statesman-politician who could be trusted and possessed of the skills to argue for change might make a difference. I know of no such person.
I agree with Titan and would add a few other indicators. (1) The older you get, the more the average person begins to understand how elected officials directly impact their lives. Income tax, health insurance, and unfunded pension liabilities become less abstract the more you age. (2) The older you get, the higher the probability that you were “wronged” in a major way. So you vote to prevent that from ever reoccurring.
As a 30 something and lifelong Illinois resident of Chicago, Springfield and the suburbs, I agree with - Anon - Friday, Sep 16, 16 @ 10:15 am. I have already decided I will not start my family in Illinois. I love Illinois, but will not be a tax slave to the generation who got us into this mess. We are all immigrants to this country. My ancestors knew when to leave their country for better opportunity. Leaving Illinois is no different. I hope when my kids are my age, they see Illinois as a place of good government and opportunity. There are plenty of mid-size cities that have grown into large beautiful cities over the past 20-30 years without the degree of issues in Chicago and Illinois.
When the world is flat, traditional “hubs” like Chicago still stand – but are less magnetic to those who have found better options.
Older people aren’t as selfish a this implies. They are willing to pay for things needed. I know plenty of old people who are willing to chip in to make the state function again.
No, it is observation that disputes the opening statement “It’s also why you probably won’t see a state income tax imposed on retirement income…” Just because there’s a lot of old people, doesn’t mean you can’t raise taxes on retirement. When I have 100k to spend on a survey I’ll hire someone to do it.
Every generation has unique and often unexpected challenges.
Most boomers grew up having survivors of the Great Depression in their families and neighborhoods. They heard the stories, learned lessons from those experiences. As they started working many Boomers made adjustments and decisions for themselves in real time regarding the important balance between realistic spending in order to manage life day to day— and saving for the future.
Practically every boomer I know is helping fund an elderly relative and in many cases is helping fund a millennial child or two who are struggling. Boomers know they have less likelihood of their own kids being able to help them in old age, so wanting to hang onto their diminishing retirement assets is not greed. It is self preservation.
Relax. It’s not you personally. It’s your whole cohort. Whether or not you feel like you did your best is moot, you still paid Illinois Income Taxes that were insufficient to pay for services rendered. You still benefited from the malfeasance, especially if your retirement isn’t taxed.
===Taxing retirement income to completely solve our fiscal problems is simplistic.===
Who is talking about completely? Sir Reel, that’s a strawman argument. The expense of refusing to tax retirement cost the state $21 billion dollars from 1993 to 2013 in 2013 dollars.
Depending on the tax rate, the expense is 1.5 ~ 3 billion a year.
Is it the silver bullet? Nah, but it can be a big part of the solution.
Best part? Actual low income seniors don’t have any federally taxed retirement income to be subtracted from their Illinois base income tax because the federal government already excludes income from the AGI. That’s what that fancy column A and column B are all about.
– Shouldn’t you have some money stashed for these problems after a life of work? –
Right sunshine as soon as I’m done paying off my students loans, saving for my kids college while paying $500 a week for child care because the days of single income families are long gone.
But hey, enjoy that pension after a lifetime of excellent and cheap state services. Feel free to complain when they raise taxes to fund schools, and threaten to leave if they need to raise taxes. You earned it.
Meanwhile, my generation will reap the whirlwind, while finding joy in the breeze.
Tax the wealthy properly first, then I’ll be more willing to “chip in” with a tax on my tiny fraction of what the likes of Ken Griffen, Penny Pritzker, and Our Dear Govenor haul in in a WEEK.
Or how about that financial transaction tax?
We are devouring ourselves, people, and the ultra-wealthy are winning and laughing at us!
Please understand the pie chart shown is NOT a new occurrence. In the 80’s, the World War IIers outvoted the baby boomers. Today, the Boomers have that percentage, and in 20 years the Gen-Xers take over. I do agree in the long run structural tax reform is needed, but I am not holding my breath waiting for any elected official to step up. In the meantime, I will Google those states with the most favorable tax rates and will likely move to one of them in a couple of years. And Anonymous, I will not feel guilty about it.
=Tax the wealthy properly first, then I’ll be more willing to “chip in” with a tax on my tiny fraction==
There are no dependencies. But if there are, how about we freeze the income tax rate where it is until it covers retirement income. Then, if all the retirees agree taxes should go up for everyone, then I’m on board.
–They heard the stories, learned lessons from those experiences.–
Nah, I don’t think Boomers learned much from their parents who went through WWII and the great depression AND STILL managed to transfer the largest wealth transference to the Boomers in human history. Nope the Great Slide started on the Boomers watch when they got all that money. Neoliberalism didn’t start under the Boomers it blossomed under the Boomers. Now the investor/owner class owns our puts and our politics.
We’re one of the few states that does not tax retirement income.
So we get a governor starting clashes in class warfare, rich vs. everyone else, now we get to pit seniors vs. everyone else. Just to pay bills that our elected officials incurred but didn’t want to pay, and still don’t want to pay, and still rack up the debt. To paraphrase Veep, look at the statehouse for a great view of a soulless parade of vanity and ambition, but not a nugget of courage or self-reflection.
Taxing wages makes more sense than taxing retirement. A person with a good job and school age children is not going to move to another state because they have to pay maybe $200 more a month in taxes. That would be a 3% increase in $70k.
Now a retired person, no job, no kids at home, and a fixed income, could easily move to a warmer tax free climate. That retired person did spend retirement money in Illinois buying goods and services. Now that money goes to perhaps Florida. Businesses suffer, revenue falls, and we are back to raising taxes on wages.
I agree that it is not the Boomers that are the problem.
The issue is that younger voters do not vote. They need to take some responsibility for moving us forward. I’ve always voted but I began to take it more seriously after I turned 40
Many of us do not have pensions to tax or they are tiny due to issues with the corp we worked for during our working years.
Tell me again how we all benefit by making our seniors less financially able to pay their bills. Geez, people above complaining about paying off college loans, saving for their childrens’ college expenses, etc.! Just think if you have to pay your parents’ bills too! Be glad they can take care of themselves. No need to hit them up
And it is scary to think that some believe a senior with an income is sinfully rich at say 80 or 100k but we let off the hook those with multiples of more income. Why? See, I don’t think it’s about numbers at all. I think it’s jealousy of time.
- AARP: The new NRA - Friday, Sep 16, 16 @ 12:44 pm:
No one can seriously argue that the state shouldn’t tax retirement income after a generous exemption of, say, $50,000. That’s pretty much been the standard figure that’s been used by the policy wonks and number crunchers. If you tell older folks that the first $50,000 of their income won’t get touched, they don’t object to taxing retirement income (above $50,000). AARP, of course, resorts to scare tactics, telling seniors that the state wants to tax them into poverty, which is utter nonsense. No politician is going to go for an across-the-board tax on retirement income, for obvious reasons.
The kicker, of course, is that most seniors will be hurt by the state’s continued refusal to tax retirement income and the AARP’s success in keeping the cow sacred. No chance for property tax relief that would help a lot of seniors. Increased chance of taxing services, a tax that seniors of every income level will bear. And, of course, it makes it harder for non-seniors who have to pick up the slack. That includes businesses that provide jobs.
The money has to come from somewhere. We can’t cut our way out of this mess–even Rauner acknowledges that. And refusing to tax affluent/wealthy/upper middle class seniors hurts everyone except affluent/wealthy/upper middle class seniors.
Annon 10:31 AM I am a retired senior and I agree with some of your frustrations. As Rich Miller said, I have no problem being a part of a tax solution, as long as it is fair. Many times in the past few years our politicians and anonymous were more than willing to solve the pension debt crisis by putting it all on the backs of the retirees while leaving you alone. There was very little outcry from others to that either. Until it failed.
You mentioned that those over $75K should be taxed and I agree with that. But ,that is not an age or retirement problem. Its called a progressive tax and I am right beside you to figure out how to get one. You mentioned the great expense of a college education, and I also agree with you. I don’t know how many part time jobs and hours after it took to finally pay for it. The costs have really gotten crazy since then, my daughter is on her second masters and we help if we can. I’m with you, but the retirees didn’t make your education costs rise. I know all about babysitting costs. We raised four kids and it took both of us working to pay. It seemed like we were only working to pay the baby sitters. We spent our adult lives working two shifts not because we wanted to but because it was necessary. Its even more expensive now, but that too is not the fault of the elderly.
I’m with you man, it seems sometimes like you are frustrated and need to lash out. But just remember, we may be old but we were in your place on the circle once.
It’s simply a question of inter-generational equity. Folks seem fine with the working stiff making $30K/yr paying his full share in taxes (be it progressive or flat), but the retiree with the same retirement income pays nothing. Remember that working stiff is also out 6.2% to pay for social security. And that’s not including funding his eventual retirement on top of that. So working guy is already well behind the retiree in take home pay.
==And it is scary to think that some believe a senior with an income is sinfully rich at say 80 or 100k ==
Why does income classification matter? If I’m a working 62 year-old making $80,000, and my 60 year-old neighbor is retired but has an $80,000 pension, why do I pay taxes and he does not?
** It’s simply a question of inter-generational equity. Folks seem fine with the working stiff making $30K/yr paying his full share in taxes (be it progressive or flat), but the retiree with the same retirement income pays nothing. Remember that working stiff is also out 6.2% to pay for social security. And that’s not including funding his eventual retirement on top of that. So working guy is already well behind the retiree in take home pay. **
You can’t be serious. The retiree has already paid 40+ years in taxes and social security, as well as funding their retirement in some fashion. You sound a bit bitter at having to work your way through life like seniors already have. Be careful what you wish for, you’ll be old some day.
At least some retirees (a lot in my group of contemporaries) are helping support either parents or grown kids and their families. If the State were to tax retirement income, I wonder how much that would drop and if it would eventually result in more people on government assistance? Have the IDOR people tried to model that scenario and would the State be a net winner or loser?
Be thankful that you don’t have the medical expenses that come with older age. If you live long enough, you will. Any retiree who has savings has this money for their medical bills, nursing home, end of life expenses. To hear some of these people talk, you’d think every retiree is cruising the south of France on their yacht! What most retirees fear most is not being able to pay for their medical/end of life care, and burdening their children. That is true of myself. I would like my children to have their own money for themselves, not to pay my nursing home bills, as I did for my mother.
- Aldyth - Friday, Sep 16, 16 @ 10:01 am:
Choose wisely.
- titan - Friday, Sep 16, 16 @ 10:02 am:
Older people tend to be more stable in their residences (i.e. they stay in one place longer) and are more likely to own their residence (so as to see the annual property tax bill, with its line by line of how much they’re paying to each local unit of government). Those 2 things inspire some degree of higher registration and voting participation.
- Anonymous - Friday, Sep 16, 16 @ 10:04 am:
Yep, so good luck with taxing retirement income.
- Anonymous - Friday, Sep 16, 16 @ 10:13 am:
Maybe another reason why they vote in the numbers they do is because they pay more attention to issues and have the wisdom to assess them. My kids don’t know half of what’s going on—too busy with office politics of their own, their kids, their vacation time. These things seem to come together in focus better with age and the time and wisdom it affords you. It’d be nice if young people paid attention but I think it’s asking too much.
- Anon - Friday, Sep 16, 16 @ 10:15 am:
That’s cool. I’ve been planning on moving for a while. I don’t see much of a huge benefit for being on the hook for baby boomer financial malfeasance when they refuse to be part of the solution.
- Honeybear - Friday, Sep 16, 16 @ 10:18 am:
Rather happy that my demographic 45-54 was not too bad. Well……18% is bad but….you know.
- Anonymous - Friday, Sep 16, 16 @ 10:21 am:
===That’s cool. I’ve been planning on moving for a while.===
Buh-Bye.
- DGD - Friday, Sep 16, 16 @ 10:22 am:
HB - I think thats the % of the total number of voters, not % of 45-54 year olds that voted…
- ChicagoVinny - Friday, Sep 16, 16 @ 10:23 am:
How are each of these groups doing in comparison to their % of population - i.e. who’s punching above/below their weight?
- anon - Friday, Sep 16, 16 @ 10:27 am:
The proportion of the vote for each cohort rises with age. So 19-24 year olds constituted only 7% of the vote, while those older than 64 constitued 26%, more than one in four. What legislative candidate in a tough primary would want to alienate one in four voters by voting to tax their pensions and Social Security??
- Anon - Friday, Sep 16, 16 @ 10:31 am:
===Buh-Bye.===
LOL — Forgive me, I thought there might be less snark from the audience of a blog that discuses declining population and changing economic factors. But seriously, y’all are short 8 billion dollars from this hokey FY 17 budget nonsense, y’all didn’t even pass a FY 16 budget, and if y’all don’t increase taxes you’re going to need to cut almost all of your non-education discretionary spending and some of your K-12 education spending too.
But taxing retirement income? Nah. Can’t do that. Never mind that seniors in the state enjoy the lowest level of poverty, that more than half of the benefits to that tax expenditure go to households earning over 75k, and that things like the pension debt and deferred capital maintenance literally represent services received by folks decades ago that weren’t completely paid for.
We’ll just cut those folks out of the income tax base. Let em run out on the bills and ask younger Illinoisans to pay more for their college education and ask them to pay higher tax rates to pay for services their parents and grand parents received.
That’s a heck of a way to run a civil society, right?
- Anonymous - Friday, Sep 16, 16 @ 10:38 am:
Why would seniors NOT have the lowest poverty rate? ! In my day, I was raised to save for my retirement! Save for the potential catastrophic illness! Save to pay the nursing home bills so that my children aren’t saddled with debt from end of my life! What would the benefits be to our society if every senior were destitute? Hello? Shouldn’t you have some money stashed for these problems after a life of work?
- Angry Chicagoan - Friday, Sep 16, 16 @ 10:40 am:
It’s starting to feel like the state is sleepwalking into completely avoidable terminal decline. Chicago can always concoct another tax . . . . . the state of Illinois, between political gridlock, arbitrary constitutional limits and cowardice, cannot.
And (and I wish the posts supported bolding here or something) . . . Why is it that we continue to allow a standard IRA to be converted into a Roth free of Illinois tax? That’s double-dipping by any standard. And unique among the 50 states.
- Anonymous - Friday, Sep 16, 16 @ 10:41 am:
Do younger people want to forego the potential inheritance awaiting them by having their parents pay higher taxes? One reason besides saving for the problems aging brings is to hopefully leave a few dollars to your descendants. Or do young people not want that?
- Anonymous - Friday, Sep 16, 16 @ 10:47 am:
Boomers:”I got mine, pffft to the rest of you”
- Sir Reel - Friday, Sep 16, 16 @ 10:47 am:
I’m a Baby Boomer and I take offense at being held responsible for the fiscal problems facing Illinois. I have supported candidates and politicians who have supported tax increases. That hasn’t always made for great conversations with friends and family.
I worked in government. I made my displeasure with waste and especially patronage known and I’m sure it didn’t help my career.
Lumping all baby boomers together is simplistic. Taxing retirement income to completely solve our fiscal problems is simplistic.
- Honeybear - Friday, Sep 16, 16 @ 10:48 am:
– Shouldn’t you have some money stashed for these problems after a life of work? –
These days it’s near impossible to save. The price of everything is up and it’s all most people can do to get by. The older generations really don’t get this and browbeat my generation with quotes like this. You’re not unique. My own mother and mother in law haven’t the slightest idea how much the world has changed since they had us. It’s orders of magnitude more expensive and wages have been flat since the seventies.
- Angry Chicagoan - Friday, Sep 16, 16 @ 10:49 am:
The state might start taxing conversions of standard IRAs into Roth. We’re the only income tax state that neither taxes retirement income nor taxes IRA conversions. By any standard that’s double dipping on a deduction. And indicative of how unwilling we seem to be to face up to our financial problems as a state.
- Bogey Golfer - Friday, Sep 16, 16 @ 10:53 am:
=Boomers:”I got mine, pffft to the rest of you”= Amen brother. I saved money for my son to go to college, so he wouldn’t have any debt. After 2 years, he quit college and is stocking shelves at at a big box store. Expect the wife and I will use his remaining funds in Europe.
- Ahoy! - Friday, Sep 16, 16 @ 10:54 am:
Also explains why we have so many problems, way too many baby boomers voting.
- Honeybear - Friday, Sep 16, 16 @ 11:01 am:
–Do younger people want to forego the potential inheritance awaiting them by having their parents pay higher taxes?–
Do you really believe there will be anything left for the next generation? I don’t. It’s not going to be anything like the greatest generations transference to the boomers.
- Cook County Commoner - Friday, Sep 16, 16 @ 11:01 am:
And the newer older folks I know who were apathetic in the past now are watching elections and voting.
Although sound public policy arguments exit (see Anon, 10:31am), the main driver in my older crowd is basic existentialism. Deteriorating health, increasing health costs, home repairs, car repairs and no back-stop for private retirement savings will render a fairly unanimous result on anyone advocating increased taxes without a clear plan for funamental change and the leaders in the state assembly unmistakenly signaling overwhelming approval.
Certainly, a statesman-politician who could be trusted and possessed of the skills to argue for change might make a difference. I know of no such person.
- MAGA - Friday, Sep 16, 16 @ 11:14 am:
I agree with Titan and would add a few other indicators. (1) The older you get, the more the average person begins to understand how elected officials directly impact their lives. Income tax, health insurance, and unfunded pension liabilities become less abstract the more you age. (2) The older you get, the higher the probability that you were “wronged” in a major way. So you vote to prevent that from ever reoccurring.
As a 30 something and lifelong Illinois resident of Chicago, Springfield and the suburbs, I agree with - Anon - Friday, Sep 16, 16 @ 10:15 am. I have already decided I will not start my family in Illinois. I love Illinois, but will not be a tax slave to the generation who got us into this mess. We are all immigrants to this country. My ancestors knew when to leave their country for better opportunity. Leaving Illinois is no different. I hope when my kids are my age, they see Illinois as a place of good government and opportunity. There are plenty of mid-size cities that have grown into large beautiful cities over the past 20-30 years without the degree of issues in Chicago and Illinois.
When the world is flat, traditional “hubs” like Chicago still stand – but are less magnetic to those who have found better options.
- Honeybear - Friday, Sep 16, 16 @ 11:16 am:
Ahoy, are you Gen-x like me?
- NoGifts - Friday, Sep 16, 16 @ 11:16 am:
Older people aren’t as selfish a this implies. They are willing to pay for things needed. I know plenty of old people who are willing to chip in to make the state function again.
- Rich Miller - Friday, Sep 16, 16 @ 11:18 am:
===I know plenty of old people who are willing to chip in to make the state function again. ===
The plural of anecdote is not data.
- NoGifts - Friday, Sep 16, 16 @ 11:25 am:
No, it is observation that disputes the opening statement “It’s also why you probably won’t see a state income tax imposed on retirement income…” Just because there’s a lot of old people, doesn’t mean you can’t raise taxes on retirement. When I have 100k to spend on a survey I’ll hire someone to do it.
- RNUG - Friday, Sep 16, 16 @ 11:26 am:
== Maybe another reason why they vote in the numbers they do is because they pay more attention to issues and have the wisdom to assess them. ==
I think it’s more about having the time to actually pay attention.
== Taxing retirement income to completely solve our fiscal problems is simplistic. ==
And, at best, it will only close part of the structural gap.
- Responsa - Friday, Sep 16, 16 @ 11:41 am:
Every generation has unique and often unexpected challenges.
Most boomers grew up having survivors of the Great Depression in their families and neighborhoods. They heard the stories, learned lessons from those experiences. As they started working many Boomers made adjustments and decisions for themselves in real time regarding the important balance between realistic spending in order to manage life day to day— and saving for the future.
Practically every boomer I know is helping fund an elderly relative and in many cases is helping fund a millennial child or two who are struggling. Boomers know they have less likelihood of their own kids being able to help them in old age, so wanting to hang onto their diminishing retirement assets is not greed. It is self preservation.
- Anon - Friday, Sep 16, 16 @ 11:44 am:
===I take offense at being held responsible===
Relax. It’s not you personally. It’s your whole cohort. Whether or not you feel like you did your best is moot, you still paid Illinois Income Taxes that were insufficient to pay for services rendered. You still benefited from the malfeasance, especially if your retirement isn’t taxed.
===Taxing retirement income to completely solve our fiscal problems is simplistic.===
Who is talking about completely? Sir Reel, that’s a strawman argument. The expense of refusing to tax retirement cost the state $21 billion dollars from 1993 to 2013 in 2013 dollars.
Depending on the tax rate, the expense is 1.5 ~ 3 billion a year.
Is it the silver bullet? Nah, but it can be a big part of the solution.
Best part? Actual low income seniors don’t have any federally taxed retirement income to be subtracted from their Illinois base income tax because the federal government already excludes income from the AGI. That’s what that fancy column A and column B are all about.
- Dee Lay - Friday, Sep 16, 16 @ 11:48 am:
– Shouldn’t you have some money stashed for these problems after a life of work? –
Right sunshine as soon as I’m done paying off my students loans, saving for my kids college while paying $500 a week for child care because the days of single income families are long gone.
But hey, enjoy that pension after a lifetime of excellent and cheap state services. Feel free to complain when they raise taxes to fund schools, and threaten to leave if they need to raise taxes. You earned it.
Meanwhile, my generation will reap the whirlwind, while finding joy in the breeze.
- RIJ - Friday, Sep 16, 16 @ 11:49 am:
Tax the wealthy properly first, then I’ll be more willing to “chip in” with a tax on my tiny fraction of what the likes of Ken Griffen, Penny Pritzker, and Our Dear Govenor haul in in a WEEK.
Or how about that financial transaction tax?
We are devouring ourselves, people, and the ultra-wealthy are winning and laughing at us!
- Bogey Golfer - Friday, Sep 16, 16 @ 11:52 am:
Please understand the pie chart shown is NOT a new occurrence. In the 80’s, the World War IIers outvoted the baby boomers. Today, the Boomers have that percentage, and in 20 years the Gen-Xers take over. I do agree in the long run structural tax reform is needed, but I am not holding my breath waiting for any elected official to step up. In the meantime, I will Google those states with the most favorable tax rates and will likely move to one of them in a couple of years. And Anonymous, I will not feel guilty about it.
- City Zen - Friday, Sep 16, 16 @ 11:53 am:
==Do younger people want to forego the potential inheritance awaiting them by having their parents pay higher taxes?==
I’ll gladly forego 3.75% of my inheritance, assuming anything is left.
- Piece of Work - Friday, Sep 16, 16 @ 11:59 am:
My wife and I pay monthly for Long Term Care insurance. The younger generation pays for tats, smokes and the latest cell phone.
Tell me again who is responsible.
- City Zen - Friday, Sep 16, 16 @ 12:00 pm:
=Tax the wealthy properly first, then I’ll be more willing to “chip in” with a tax on my tiny fraction==
There are no dependencies. But if there are, how about we freeze the income tax rate where it is until it covers retirement income. Then, if all the retirees agree taxes should go up for everyone, then I’m on board.
- Honeybear - Friday, Sep 16, 16 @ 12:02 pm:
–They heard the stories, learned lessons from those experiences.–
Nah, I don’t think Boomers learned much from their parents who went through WWII and the great depression AND STILL managed to transfer the largest wealth transference to the Boomers in human history. Nope the Great Slide started on the Boomers watch when they got all that money. Neoliberalism didn’t start under the Boomers it blossomed under the Boomers. Now the investor/owner class owns our puts and our politics.
We’re one of the few states that does not tax retirement income.
- My New Handle - Friday, Sep 16, 16 @ 12:19 pm:
So we get a governor starting clashes in class warfare, rich vs. everyone else, now we get to pit seniors vs. everyone else. Just to pay bills that our elected officials incurred but didn’t want to pay, and still don’t want to pay, and still rack up the debt. To paraphrase Veep, look at the statehouse for a great view of a soulless parade of vanity and ambition, but not a nugget of courage or self-reflection.
- A Jack - Friday, Sep 16, 16 @ 12:23 pm:
Taxing wages makes more sense than taxing retirement. A person with a good job and school age children is not going to move to another state because they have to pay maybe $200 more a month in taxes. That would be a 3% increase in $70k.
Now a retired person, no job, no kids at home, and a fixed income, could easily move to a warmer tax free climate. That retired person did spend retirement money in Illinois buying goods and services. Now that money goes to perhaps Florida. Businesses suffer, revenue falls, and we are back to raising taxes on wages.
- Belle - Friday, Sep 16, 16 @ 12:30 pm:
I agree that it is not the Boomers that are the problem.
The issue is that younger voters do not vote. They need to take some responsibility for moving us forward. I’ve always voted but I began to take it more seriously after I turned 40
Many of us do not have pensions to tax or they are tiny due to issues with the corp we worked for during our working years.
- Anonymous - Friday, Sep 16, 16 @ 12:37 pm:
Tell me again how we all benefit by making our seniors less financially able to pay their bills. Geez, people above complaining about paying off college loans, saving for their childrens’ college expenses, etc.! Just think if you have to pay your parents’ bills too! Be glad they can take care of themselves. No need to hit them up
- RNUG - Friday, Sep 16, 16 @ 12:39 pm:
== Nope the Great Slide started on the Boomers watch when they got all that money. ==
Uh, I think somebody left a few digits off my check …
- Anonymous - Friday, Sep 16, 16 @ 12:43 pm:
And it is scary to think that some believe a senior with an income is sinfully rich at say 80 or 100k but we let off the hook those with multiples of more income. Why? See, I don’t think it’s about numbers at all. I think it’s jealousy of time.
- AARP: The new NRA - Friday, Sep 16, 16 @ 12:44 pm:
No one can seriously argue that the state shouldn’t tax retirement income after a generous exemption of, say, $50,000. That’s pretty much been the standard figure that’s been used by the policy wonks and number crunchers. If you tell older folks that the first $50,000 of their income won’t get touched, they don’t object to taxing retirement income (above $50,000). AARP, of course, resorts to scare tactics, telling seniors that the state wants to tax them into poverty, which is utter nonsense. No politician is going to go for an across-the-board tax on retirement income, for obvious reasons.
The kicker, of course, is that most seniors will be hurt by the state’s continued refusal to tax retirement income and the AARP’s success in keeping the cow sacred. No chance for property tax relief that would help a lot of seniors. Increased chance of taxing services, a tax that seniors of every income level will bear. And, of course, it makes it harder for non-seniors who have to pick up the slack. That includes businesses that provide jobs.
The money has to come from somewhere. We can’t cut our way out of this mess–even Rauner acknowledges that. And refusing to tax affluent/wealthy/upper middle class seniors hurts everyone except affluent/wealthy/upper middle class seniors.
- Gobblers Knob - Friday, Sep 16, 16 @ 12:51 pm:
Annon 10:31 AM I am a retired senior and I agree with some of your frustrations. As Rich Miller said, I have no problem being a part of a tax solution, as long as it is fair. Many times in the past few years our politicians and anonymous were more than willing to solve the pension debt crisis by putting it all on the backs of the retirees while leaving you alone. There was very little outcry from others to that either. Until it failed.
You mentioned that those over $75K should be taxed and I agree with that. But ,that is not an age or retirement problem. Its called a progressive tax and I am right beside you to figure out how to get one. You mentioned the great expense of a college education, and I also agree with you. I don’t know how many part time jobs and hours after it took to finally pay for it. The costs have really gotten crazy since then, my daughter is on her second masters and we help if we can. I’m with you, but the retirees didn’t make your education costs rise. I know all about babysitting costs. We raised four kids and it took both of us working to pay. It seemed like we were only working to pay the baby sitters. We spent our adult lives working two shifts not because we wanted to but because it was necessary. Its even more expensive now, but that too is not the fault of the elderly.
I’m with you man, it seems sometimes like you are frustrated and need to lash out. But just remember, we may be old but we were in your place on the circle once.
- City Zen - Friday, Sep 16, 16 @ 1:13 pm:
It’s simply a question of inter-generational equity. Folks seem fine with the working stiff making $30K/yr paying his full share in taxes (be it progressive or flat), but the retiree with the same retirement income pays nothing. Remember that working stiff is also out 6.2% to pay for social security. And that’s not including funding his eventual retirement on top of that. So working guy is already well behind the retiree in take home pay.
- Honeybear - Friday, Sep 16, 16 @ 1:14 pm:
Sorry, RNUG, I got on my generational high horse and generalized. I’m fussy today. My apologies.
- City Zen - Friday, Sep 16, 16 @ 1:20 pm:
==And it is scary to think that some believe a senior with an income is sinfully rich at say 80 or 100k ==
Why does income classification matter? If I’m a working 62 year-old making $80,000, and my 60 year-old neighbor is retired but has an $80,000 pension, why do I pay taxes and he does not?
Why is the working guy “sinful”?
- DGD - Friday, Sep 16, 16 @ 1:25 pm:
** It’s simply a question of inter-generational equity. Folks seem fine with the working stiff making $30K/yr paying his full share in taxes (be it progressive or flat), but the retiree with the same retirement income pays nothing. Remember that working stiff is also out 6.2% to pay for social security. And that’s not including funding his eventual retirement on top of that. So working guy is already well behind the retiree in take home pay. **
You can’t be serious. The retiree has already paid 40+ years in taxes and social security, as well as funding their retirement in some fashion. You sound a bit bitter at having to work your way through life like seniors already have. Be careful what you wish for, you’ll be old some day.
- RNUG - Friday, Sep 16, 16 @ 1:26 pm:
At least some retirees (a lot in my group of contemporaries) are helping support either parents or grown kids and their families. If the State were to tax retirement income, I wonder how much that would drop and if it would eventually result in more people on government assistance? Have the IDOR people tried to model that scenario and would the State be a net winner or loser?
- RNUG - Friday, Sep 16, 16 @ 1:28 pm:
== got on my generational high horse and generalized ==
I didn’t take it personally … but I couldn’t pass up the line.
- City Zen - Friday, Sep 16, 16 @ 1:34 pm:
== Be careful what you wish for, you’ll be old some day.==
I certainly hope so, because the other option ain’t so great.
- Anonymous - Friday, Sep 16, 16 @ 1:47 pm:
CityZen
Be thankful that you don’t have the medical expenses that come with older age. If you live long enough, you will. Any retiree who has savings has this money for their medical bills, nursing home, end of life expenses. To hear some of these people talk, you’d think every retiree is cruising the south of France on their yacht! What most retirees fear most is not being able to pay for their medical/end of life care, and burdening their children. That is true of myself. I would like my children to have their own money for themselves, not to pay my nursing home bills, as I did for my mother.
- Grandson of Man - Friday, Sep 16, 16 @ 2:31 pm:
I respect and admire older people voting more. It’s a shame that turnout is as low as it is, particularly in midterms.
- Just Chilling - Friday, Sep 16, 16 @ 3:13 pm:
–”The plural of anecdote is not data.”–
Rich, that is beautiful. I will happily give credit while ripping it off to use on my students.