Should higher-income seniors pay taxes on retirement?

March 8, 2011 2:51:39 PM PST
Illinois Senate President John Cullerton is backtracking on a suggestion to tax retirement income, a statement to which many seniors didn't respond well.

Cullerton's words Monday seemed aimed specifically at higher-income seniors. Despite that, ABC7 could not find a single senior who supported the idea at a senior center that represents a broad range of socio-economic backgrounds.

"Because a person is making a "whole lot of money"-- quote, quote -- you still don't know what their personal situations are," Barbara Wilson said. Wilson is one of a group of seniors who spoke with ABC7 Tuesday afternoon in west suburban Bellwood.

"Keep in mind that Illinois is only one of two states with an income tax that doesn't tax retirement income. If we taxed pensions and other retirement income we'd collect nearly $1.6 billion more," Culelrton said Monday.

No sooner did Cullerton say the words than people started questioning him on it. In a late afternoon committee hearing in Springfield, Cullerton said the trial balloon would affect only those seniors making $100,000 or more and would not tax social security income.

"I think everything should be looked at. How we go about it is something we have to work together on," Governor Pat Quinn said.

At the AARP state offices, Director Bob Gallo said, he believes the remarks were made to gauge what kind of support is out there for the idea.

"The governor and the general assembly are looking at cutting significant services for seniors," Bob Gallo, AARP said. "If you're going to tax people and take something away from them at the same time, it's kind of a double insult." Meanwhile, back at Bellwood's west suburban senior services center, reaction against the idea was nothing short of unanimous.

"Most people are in some sort of crunch already. Everything is going up," Willie Hall said.

"I don't make a $100,000 a year, that's for sure. But if you've already paid taxes on your money you've put into retirement, why are you being taxed again? It's just not fair," Kathy Schmitt said.

In a written statement Tuesday, Cullerton seemed to backtrack on his comments saying, "The only context in which such a policy could become reality would be if there was widespread bipartisan support, key protections for low-income retirees, and that the additional revenue would be used to lower overall taxes."

He also said, there is as of right now, no formal proposal to advance in Springfield.