Senior groups accuse rich foes of Pritzker’s income tax plan of running ‘dishonest ads to try and scare us’

AARP Illinois and other senior-focused interest groups voiced concerns Wednesday over “misinformation” that they say is being spread about the state’s proposed shift to a graduated income to communities that “can’t afford to be misled.”

“It makes me crazy to know my hard-working friends and neighbors are paying the same tax rate as millionaires and billionaires in this state, and it makes me angry when I see those same millionaires and billionaires spreading rumors about graduated income tax impacting retirement income,” said Wendy Edington, an AARP Illinois volunteer.

In a Zoom news conference, members of the advocacy group for retirees, as well as the Illinois Alliance for Retired Americans and Jane Addams Seniors in Action, said there’s “nothing more important” than voters passing the amendment that would change the state’s tax structure to a graduated-rate system.

AARP has paid for ads in support of the tax proposal, which Gov. J.B. Pritzker and other supporters call the “Fair Tax.”

Opponents have taken to calling it the “Tax Hike Amendment.”

But representatives for the senior groups speaking Wednesday argue that the other side is peddling “misinformation” directed at those who “can’t afford to be misled.”

“Millionaires and billionaires have teamed up to stop the Fair Tax by scaring seniors,” said Ruth Maskow of the Illinois Alliance for Retired Americans. “They’re spending millions of dollars on dishonest ads to try and scare us into voting against our own best interests. You don’t have to listen to those scare tactics. The Fair Tax is our best way to protect our retirement security.”

The advocacy groups argued that “rumors” about the state potentially opening the door to taxing retirement income are just not true.

Talk of taxing retirement income has sparked a back and forth between the two sides arguing over the proposal, with opponents seizing on a statement from state Treasurer Mike Frerichs in June.

Megan Nagorzanski/Sun-Times file

The Daily Herald reported Frerichs said a shift to a graduated tax system would “make clear you can have graduated rates when you are taxing retirement income.”

Frerichs has since tried to walk that back, saying in August he was “not pushing” for taxing retirement income.

After the right-leaning Illinois Policy Institute referenced the statement in a lawsuit filed Monday, Frerichs once again tried to clarify, insisting he opposes “creating a retirement tax in Illinois, along with the General Assembly, and Governor.

“I encourage others to join me to stand up for working families and retirees, so they get a tax cut while we ask millionaires and billionaires to pay their fair share,” Frerichs said in a statement after cancelling his own news conference on the issue Tuesday. “The fact is opponents of the fair tax have actually released plans to tax retirement income and raise taxes on everyone.”

John O’Connor/AP file

Lissa Druss, a spokeswoman for the Coalition to Stop the Proposed Tax Hike Amendment, accused “Springfield Politicians” of ”pushing plans to tax retirement income” and “attempting to rewrite history,” two reasons why “why voters can’t trust the Springfield Politicians with their Tax Hike Amendment.”

In a statement Tuesday, Druss said “no amount of backtracking” from Frerichs can “change the fact this is the worst possible time to raise taxes, and we simply can’t trust Springfield Politicians.”

The proposed amendment to the state constitution does not tax retirement income, but opponents say there’s nothing stopping legislators from doing so in the future — or raising tax rates on those who make lower or middle incomes down the line to help fill the state’s budget gap.

The potential move to a graduated-rate income tax system has been a hotly contested one, with supporters claiming opponents are trying to get out of “paying their fair share.”

Voters are not deciding on the rates when they cast their ballot in November — those rates were passed by the Legislature and signed into law by Pritzker last June.

Under that legislation, if voters approve the change to a graduated income tax system, incomes between $250,000 and $500,000 would be taxed 7.75%. It would maintain the current tax rate of 4.95% on incomes between $100,000 and $250,000, drop it to 4.9% for income from $10,000 to $100,000, and lower it to 4.75% for the first $10,000.

Income from $500,000 to $1 million would be taxed 7.85%, while income over $1 million would be taxed 7.99%.

The new tax rates would go into effect Jan. 1, 2021.