The Sun-Times scapegoating the elderly again. On taxing retirement income.

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To be clear, as a retired couple living on social security, a public employee pension and savings, we have no objection to a tax on retirement savings.

Earned income of those over 65 and who are working is already taxed in Illinois.

For years – and it has been years now – when I write about the attacks on public employee pensions someone will inevitably send me a comment about why Illinois doesn’t tax retirement income.

For years I responded that I agreed that some level of retirement savings should be taxed in Illinois if it were part of a broader system of fair taxation.

I did question why going after retirement savings was the first thing some people came up with rather than going after the ultra rich who got away with paying the same state income tax rate as working folks.

Or they paid nothing at all.

For years Illinois has been a state with a flat tax rate.

But things have changed some.

Now we have a chance to pass a constitutional amendment that would create a progressive income tax. That is a good start.

But the Chicago Sun-Times editorial board is still is bent on scapegoating the elderly for the state’s “financial woes.”

Taxing retirement savings over $100,000 a year works for me.

Taxing retirement savings is not, as the Sun-Times claims, “key to ending our (the state’s) financial woes.”

The key to ending our financial woes is to tax the rich and to stop giving tax breaks to giant corporations.

The scapegoating of the elderly is captured by this false choice:

Should we hit up, say, a middle-class truck driver who earns $50,000 a year? Should he or she pay more in state income taxes?

Or should we first hit up a retired corporate lawyer whose income in retirement tops $1 million a year. Right now, that lawyer doesn’t pay a dime on any pension he might have.

We’re on the side of the truck driver, and we bet you are, too.

Of course. Tax the corporate lawyer and his million bucks.

However, the elderly and the retired workers in Illinois are not mostly millionaire corporate lawyers.

A high percentage are poor.

Very few are rich.

To protect their wealth, the rich in this state organized a public relations campaign to justify stealing the earned pensions of public employees by painting us as greedy.

We are the reason the state couldn’t fund schools, for example.

Another false choice: Schools or pensions.

They’re still at it.

The truth is that the essential reason for the state’s financial woes is the failure of the rich to pay what they they owe.

Even if it is easier to blame old people.

 

 

4 thoughts on “The Sun-Times scapegoating the elderly again. On taxing retirement income.

  1. I just read that the average social security payout is only $18,000 a year. Certainly any plan to tax retirement income should leave that alone. But I worked for state legislators that told me that you could not find any legislator that would be prepared to be the lead sponsor on a bill to take pensions or any kind of retirement income. They would not want the grief. It ain¹t going happen! Bob Lyons

    From: Fred Klonsky Reply-To: Fred Klonsky Date: Sunday, September 15, 2019 at 8:55 AM To: Bob Lyons Subject: [New post] The Sun-Times scapegoating the elderly again. On taxing retirement income.

    WordPress.com Fred Klonsky posted: ” To be clear, as a retired couple living on social security, a public employee pension and savings, we have no objection to a tax on retirement savings. Earned income of those over 65 and who are working is already taxed in Illinois. For years – and it”

  2. Excellent commentary, Fred. Your often-times brilliant comments regarding the corruption and deceit related to unfair taxation in Illinois deserve a place on the second or third page of Chicago’s two major newspapers……much like the way Mike Royko’s fine commentaries were seen on a daily basis in the Chicago Daily News and the Chicago Sun-Times. Thank you

  3. Interesting how the editorial casually glosses over the lack of continued state payments as a contributory factor these current pension deficits. What they fail to mention is that it was mandatory for annuitants to pay their portion–no option like the legislators took. Why not put the blame where it firmly belongs–on the perpetrators [state/legislators], not the victims? Demand legislative change and accountability with substantial penalties for not doing the job you were elected to by the very people you are trying to shortchange.. Quit this ‘blaming the victims’ mentality. It’s getting as old as we are.

  4. Yes the state and the lawmakers r have been abusing this for decades – note the lawmakers are part of the unfunded pension problem as well.

    I feel retirement income over $50,000 per person should be taxed –

    Logic Max Social Security as age 66 is $ 31,500 (round number)

    If you were a saver and accumulated $700,000 in your tax deferred plans your Minimum Distribution is $25,400 at age 70.5.

    Paying a tax on that on $7,000 would be something you can plan easily -I would think.

    In this example to have a $100,000 in retirement yearly income would require $2,000,000 in deferred saving – Sorry Illinois liability far to big

    .

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