October 10, 2020

Jo Daviess, Pope, Hardin, Carroll and Henderson counties have the highest senior populations in the state


MEDIA CONTACT: Rachel Wittel (312) 607-4977

2 million retirement-age Illinoisans face “fair tax” effects
Jo Daviess, Pope, Hardin, Carroll and Henderson counties have the highest senior populations in the state

CHICAGO (Oct. 10, 2020) – With about three weeks left until Illinoisans vote on how their income is taxed, new Illinois Policy Institute analysis finds 16% of Illinois’ total population could be facing a retirement tax should the progressive tax amendment pass. Jo Daviess, Pope, Hardin, Carroll and Henderson counties would likely be the most affected, as more than 25% of their citizens are seniors.

Every state with a progressive income tax also taxes some form of retirement income, including Connecticut, the last state to enact a progressive income tax in 1996. If Illinois taxed retirement income in the same way as Connecticut and saw the same rate of seniors moving away, Illinois would have lost 10,577 more seniors from 2012 to 2018.

Data proves the exemption of retirement income is an important tax advantage for Illinois seniors. While Illinois has suffered a record six consecutive years of population loss, Illinois retained residents age 65 and older better than every other age group from 2012 to 2018.

The most common reason residents give for wanting to leave the state is the high tax burden.

Adam Schuster, senior director of budget and tax research at the nonpartisan Illinois Policy Institute, offered the following statement:

“Connecticut, the last state to adopt a progressive income tax and start taxing retirement income, has seen its retirement-age population flee the state at twice the rate of prime working-age residents during the past decade. The heavy loss of retirees is likely part of the reason why Connecticut is now reversing course and is in the process of expanding income tax exemptions for retirees.

“Illinois should heed this as a warning. With Illinois’ economic growth already being held back by persistent population loss, the state can not afford to drive away even more residents as it works to recover from a pandemic.

To read more about how a progressive income tax could affect Illinois retirees, visit: illin.is/retireetax.

For bookings or interviews, contact media@illinoispolicy.org or (312) 607-4977.