The three candidates agreed on their insistence that the state should not tax retirement income to help balance the budget, although Pritzker has run ads accusing both Biss and Kennedy of supporting efforts to do so.
“Look me in the eye and tell me that you’ll stop running those ads,” Kennedy said.
“You have a different position today than you did yesterday,” Pritzker responded.
Kennedy also said Pritzker was lying about his stance on legalizing marijuana.
* I was planning to do yet another fact check on Kennedy today, but then this landed in my in-box…
Today, the JB Pritzker campaign released a new video highlighting Chris Kennedy’s hypocrisy at the final Democratic debate last night.
The new video features Kennedy’s line, “you should never hire someone who lies to you during a job interview” followed by Kennedy’s lies about where he stands on critical issues such as legalizing marijuana and taxing retirement income.
Pritzker’s campaign certainly has the money and agility to stand up to the barrage of attacks that will inevitably emanate from the Rauner camp in the general.
Neither of his two main opponents have demonstrated a similar ability.
If the goal is beating Rauner, advantage goes to Pritzker, warts and all.
In the latest JB TV ad on this matter, the narrator hits Kennedy on taxing retirement income then a few words later claims how JB is progressive. How is it progressive for a retired doctor to pay no state income tax but working nurses making less do?
In FY 2016 subtracting all federally taxed retirement income from taxable income cost the state 1.7 billion. In FY 2015 and FY 2014 it was about 2.3 billion each year.
The majority of that tax expenditure benefits folks with incomes over $75,000 a year and because it includes guaranteed payments to partners there are folks excluding millions of dollars in income from tax because it’s classified as retirement.
I get that it’s unpopular, but it’s because no one has really stuck to their guns about creating a larger exemption for the elderly, or placing a cap on the subtraction.
Really poor retirees already have their income excluded from tax because it’s not federally taxed. This does very little to actually benefit low income elderly.
Plus, it represents a generational transfer where the folks that decided they didn’t need to pay taxes high enough to fund their services and voted for politicians that literally created a plan to not pay into the pension fund to avoid paying the higher taxes required to address the debts and unfunded liabilities they supported creating.
Taxing some federally taxed retirement needs to be discussed and digging one’s heels in on this is going to create problems when whatever reform comes out of this mess is agreed to.
If Illinois is going to ever have a balanced budget then taxing retirement income is going to happen. Just a matter of how much and when to begin. Politicians keep spending money and now the taxpayers are going to suffer for it.
- Maximus -
I agree with you 100%. I often comment on this blog that retirement tax has to happen or this state will be in financial peril for the foreseeable future. We’re the outlier, not the norm with this issue and part of the reason we are nickle and dimed on so many other things.
==I am told you cannot tax social security benefits. ==
Everyone’s favorite Minnesota taxes social security income to the extent it’s taxed on the taxpayer’s federal return. Other states do as well but no many.
Most states do not tax retirement income because they recognize that taxes were paid on those wages while working. Social security payments are not tax deferrals, unlike pension and 401k contributions.
== Most states do not tax retirement income because they recognize that taxes were paid on those wages while working. Social security payments are not tax deferrals, unlike pension and 401k contributions. ==
So, in fairness, what tax treatment would you be in favor of for teachers (and some others) that were not allowed, by the State,to participate in Social Security?
==Most states do not tax retirement income because they recognize that taxes were paid on those wages while working.==
Mistyped. Should read “Most states do not tax social security
RNUG - Please stop with the “not allowed” argument with social security. If they are willing to deduct 6.2% of their wages then another 6.2% to cover the employer portion (yeah, that’s compensation), then adjust their entire pension plan (most SS + pension plans have lower service years multipliers), then they can join the sinking social security ship. Welcome aboard.
That’s really not true. I’m pretty sure it’s just 14.
And most of those 14 tax specific kinds of retirement income. Illinois taxes zero federally taxed retirement income — you’re thinking 401ks and pensions but failing to account for income received on K-1-Ps and K-1-Ts which can get excessive.
“ Please stop with the “not allowed” argument with social security. If they are willing to deduct 6.2% of their wages then another 6.2% to cover the employer portion (yeah, that’s compensation), then adjust their entire pension plan (most SS + pension plans have lower service years multipliers), then they can join the sinking social security ship. Welcome aboard.”
We should offer them do this or they lose their job.
==We should offer them do this or they lose their job.==
No, they should be fired or placed on sabbatical if they take that horrible offer. Social Security is the worst investment 12.4% of my wages could make. My point is nothing is lost by “not participating” in social security.
No one ever brings up taxing military income. Other states tax military income. Illinois does not. Surely it’s not as unpopular as taxing retirement income. And military personnel are not on a fixed income. Plus food, clothing, and housing is provided.