Why Tax the Rich Isn’t the Answer on Pensions

by Mark Cavers Rather than coming to the table to try and help save their members’ pensions, union officials seem content to vilify the wealthy in Illinois. Yesterday, while discussing the pension reform bill in committee, the head of AFSCME argued that all we need to do is raise taxes on the rich and our pension problem...

by Mark Cavers

Rather than coming to the table to try and help save their members’ pensions, union officials seem content to vilify the wealthy in Illinois. Yesterday, while discussing the pension reform bill in committee, the head of AFSCME argued that all we need to do is raise taxes on the rich and our pension problem will disappear:

“Although Illinois may be broke, members of the Civic Committee are not”

So will taxing the rich save us?

Illinoisans face at least $85 billion in debt to the state’s pension system, some academic studies put that number over $200 billion, and that doesn’t include local pension debt. If we take the head of AFSCME’s advice to the extreme and confiscated the wealth (not income, but everything they own: every car, home, and stock and all the way down to every last granola bar and bath towel) of all the billionaires in Illinois, we would still owe our pension system $42.9 billion. And under the current system the problem keeps getting worse.

When union officials say all we have to do is tax the rich, they are ignoring the numbers. The truth is the middle class and the poor and disadvantaged will get socked to pay for pensions. Already, Illinoisans have to work an extra week to pay for government employee pensions. Without reform the middle class will be forced to cut even more from their own budgets to pay these pension costs.