Taxing retirement income would only spur exodus, Ugaste says
Dan Ugaste doesn’t think all money is good money, even when it comes to Illinois finding a way to dig itself out from under its massive debt load.
“I oppose it.” Ugaste told the Kane County Reporter, regarding a recent new Civic Federation report that finds the state could generate as much as an added $4 billion in revenue if lawmakers taxed retirement income at the current rate on wages or on a progressive tax scale.
“The average Illinois retiree income is about $18,000 a year,” Ugaste said. “Taxing that income when retirees are out of the job market is not only unfair, but will be counterproductive. Retirees will start planning to move out of Illinois to a tax-free retirement income state, eliminating the revenue to local businesses from retirees.”
Currently, the state excludes all retirement income from its tax base, leaving it as just one of 27 states across the country to exclude all federally taxable Social Security income.
“It will also discourage people in the workforce from saving for retirement because the tax incentive is gone,” added Ugaste, a Geneva Republican running to replace retiring Rep. Steve Andersson (R-Geneva) in the 65th District. “Since savings from workers is generally invested in the stock market in pension plans or in 401(k)s, that will also mean less investment overall and in Illinois.”
An AARP Illinois poll in 2015 of state residents 50 and older found nearly 9 in 10 opposed taxing retirement income, with AARP Illinois Director of Advocacy and Outreach Ryan Gruenenfelder branding the idea “not acceptable," according to Illinois News Network.
Ugaste was even more demonstrative in his rejection of the idea.
“This is a pennywise, pound-foolish proposal that is selective economic punishment for senior citizens,” he said.
The 65th House District includes Batavia, Geneva, St. Charles, Pingree Grove, Hampshire and Huntley.