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Peoria–Jim Tobin, founding President of Taxpayers United of America (TUA) was in Peoria July 14 urging the local government to support reform of the Illinois state government pension system. “In April, City of Peoria taxpayers voted overwhelmingly against advisory property tax hikes to pay government employee pensions,” said Tobin. “79.3% of voters said no to raising property taxes for police pensions and 74% of voters said no to a firefighter property tax increase.”

“The elephant in the room has been ignored long enough. It is literally destroying the City of Peoria and has to be addressed.”

“In 2018, Peoria got rid of 22 firefighter and 16 police positions. In 2019, Peoria residents faced a new property tax devoted to funding police and fire pensions, which are already funded by property taxes. In 2020, the city cut 45 jobs and offered early retirement incentives to deal with budgeting issues.”

“The Peoria pension problem has grown so bad that according to City Manager Patrick Urich, it is cheaper to run local police and fire ragged with overtime than to hire new government employees. In our upside-down world, $4.6M in 2020 overtime pay is the least expensive option.”

“According to the city manager, in the last 10 years the city eliminated 145 positions from the city’s budget, and put that money into pensions. Aren’t taxpayer dollars supposed to go to essential services? Are retired government employees really more essential to Peoria residents than police, fire, and other government services?”

“I would love to show you the astounding pensions that police and fire receive, but government unions and Illinois Governor Jay Robert ‘J. B.’ Pritzker closed the book on that throughout the state. However, I do have plenty of other city and local pensions to give as examples.”

“Take for example former City of Peoria employee Michael D McKnight. McKnight receives, courtesy of taxpayer property taxes, an estimated $148,104 annually, and he retired at the ripe old age of 59. For a measly contribution of $99,325 to the pension fund, he is estimated to receive $2,600,808 from his pension. Not a bad deal.”

“The Peoria government pension system, like the rest of the Illinois government pension system, is broken. There are ways solve the pension crisis, but they are growing further out of reach. The enormous downward economic pressure because of population loss in example makes it hard to grow out of pension debt.”

“Peoria elected officials should pass a resolution calling for the Illinois General Assembly to enact a pension reform amendment to the Illinois constitution. Such an amendment would enable Peoria to restructure its pension debts and to be fairer for both taxpayers and government employees looking to retire.”

“Additionally, placing all new hires in a 401(k) system would reduce costs and grant government employees more control over their retirement strategy.”

Click Here to View all Peoria City Pensions of $100,000 2021

Click Here to View Top 200 Peoria area IMRF pensions

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If Joe Biden’s proposed tax hike on capital gains is passed into law, the U.S. would wind up with the highest top marginal tax rate on capital gains in the Organization for Economic Co-operation and Development (OECD), according to a new report by the nonpartisan Washington-based Tax Foundation.

The marginal tax rate is the amount of additional tax paid for every additional dollar earned as income.

The foundation’s Clifton Painter writes that when combined with the 3.8 percent net investment income tax (NIIT) and average top state capital gains tax rates, the proposal would lead to a top combined rate of 48.4 percent—significantly higher than the current 29 percent rate.

“Such a brutal tax hike would be a disaster for the U.S. economy,” said Jim Tobin, economist and president of Taxpayers United of America (TUA).

The proposal would tax long-term capital gains as ordinary income for taxpayers with taxable income above $1 million and raise the top marginal income tax rate to 39.6 percent.

The report points out that many countries seek to incentivize long-term saving by providing a lower tax rate or a partial exemption on long-term gains.

In the U.S, short-term capital gains (held for less than one year) are taxed as ordinary income. Long-term capital gains (held for more than one year) are taxed at lower rates, ranging from 0 percent to 20 percent, plus a 3.8 percent NIIT, depending on an investor’s income. In addition to these federal taxes, states tax capital gains at an average rate of 5.2 percent.

The Biden administration’s proposal would make the U.S. top capital gains rate an outlier within the OECD at 48.4 percent, joining only two other countries with rates at or above 40 percent, writes Painter.

A business must first pay corporate income tax, and investors see their gains from after-tax profits. The “integrated tax rate” on corporate income reflects both the corporate income tax and the dividends or capital gains tax—the total tax levied on corporate income. The integrated tax rate on corporate income distributed as dividends would rise from 47.3 percent to 65.1 percent under Biden’s tax plan, which would be highest in the OECD.

According to Tobin, the foundation correctly emphasizes that “Higher tax rates on individual shareholders reduce the return to saving, and higher taxes on corporations raise the cost of investment, reducing saving and investment. Lower investment levels and reductions in capital stock translate to lower work productivity, reduced wages, and lower economic output.”

Source: https://taxfoundation.org/biden-capital-gains-tax-rate-oecd/