Illinois is a rare state that does not tax retirement income. No politician has openly called for starting to, but it's an option. The nonpartisan Civic Federation recommends it as a way to stabilize the state's finances, especially as the number of senior citizens living in Illinois is projected to grow.
But that also means the number of elderly voters will rise. The AARP's Bob Gallo says seniors don't want their pensions and social security taxed.
"They know it would have a major detrimental impact on their household budgets, on their ability to prepare for and enjoy a secure retirement, or even on their ability to stay retired.”
Illinois could opt to tax only retirement income above a certain level, say $50,000; advocates of that route argue seniors who don't have enough money to retire still have to pay income taxes, while those who are well off enough to stop working, don't.
