A new report out says seniors will be adversely affected by the so-called Fair Tax if it were to pass. Illinois Policy says retiree’s income tax would jump by 9.3%. Currently, Illinois retirees don’t pay state income tax. Under the governor’s proposal, those seniors would pay an average income tax of 4.7% with some paying as high as 9.3. The Illinois Policy Institute opines that retirees are among the groups least likely to leave the state, however a significant tax could threaten that. While the Land of Lincoln currently has no tax on retirement income, sales and property taxes are among the highest in the nation. The Illinois Policy Institute, founded in 2002, is a libertarian non profit think tank with offices in Chicago and Springfield. The group is active in education policy, pension policy, and state budget issues.
Tax implications at different income levels, according to IPI:
Income Taxes paid at 4.7% Taxes paid at proposed 9.3%
$25,000 $1,175 $2,325
$50,000 $2,350 $4,650
$75,000 $3,525 $6,975
$100,000 $4,700 $9,300
$250,000 $11,750 $23,250