Analysis: Sangamon County retirees could pay $4,711.94 annually under graduated income tax hike
The 34,846 retirees in Sangamon County could pay as much as $4,711.94 in state income taxes if voters approve Gov. J.B. Pritzker’s graduated tax hike amendment on Nov. 3, according to an analysis by the Sangamon Sun.
Countywide, the graduated tax plan could raise as much as $70,772,526 from retiree taxes. And statewide, such retiree taxes could raise more than $3 billion, according to the analysis. The analysis calculates the total state income tax that would be paid if Illinois retirees were required to pay tax rates between 4.7 and 9.3 percent on their income.
The median state income tax across 50 states is 4.7 percent. Non-retiree Illinoisans currently pay 4.95 percent; Pritzker is promising to raise those rates significantly, however. According to the U.S. Census, Illinois is home to approximately 745,000 senior retiree households, headed by someone over age 65. They currently pay no state income tax on Social Security or pension income.
While Pritzker said the tax hike is aimed at the rich, it can be applied to any demographic, including retirees.
In fact, retirees are taxed in all 32 states that have a progressive tax.
The 34,846 retirees in Sangamon County could pay as much as $4,711.94 in state income taxes if voters approve Gov. J.B. Pritzker’s graduated tax hike amendment Nov. 3, according to an analysis by the Sangamon Sun. salaries and richer pensions to public employees. He expects higher income taxes to fund a 25 percent increase in the annual state budget -- an increase of $10 billion in state income taxes paid, and spending, per year.
Currently, state income tax hikes must be paid by all taxpayers and cannot be limited to specific groups, like small business owners or retirees.
Seven states now do not tax any individual income: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
Two other states – New Hampshire and Tennessee – impose only income taxes on dividends and interest.
Three states exempt pension income entirely for qualified individuals: Illinois, Mississippi and Pennsylvania.
Pritzker is hoping voters approve an amendment to the state constitution that would make state income tax rates unlimited and allow legislators to extend income taxes to senior retirement income.
Read the full analysis and view more counties by clicking here: