Income tax ‘surcharge,’ other measures needed to pay down pensions, business group says

Illinois is one of three states that charges income tax but excludes retirement income. Ending the exclusion for people with $100,000 or more in retirement income could net $1.8 billion a year, a new report finds. (Sun-Times file)

Illinois lawmakers have shown fiscal discipline lately, but politically toxic tax increases must be considered to fully fund pensions and improve the state’s credit rating, senior business leaders in Chicago said in a report Wednesday.

The report by the Civic Committee of the Commercial Club of Chicago said it could support income tax “surcharges” for people and companies, lasting 10 years, provided the additional revenue is earmarked mostly for pensions.