New State Tax Burden Analysis Just Came Out… Guess Which State Came in Dead Last By Dan McCaleb
March 18, 2018 at 2:16pm
Illinoisans’ tax burden is high.
Anyone who lives here and works here knows that.
Property taxes. Income taxes. Sales taxes. Annual car registrations fees. And so on.
Seemingly everyone except those who earned it has their hands in our pockets, taking what should belong to us.
While we know we pay too much in taxes, the latest analysis by a national financial website puts into perspective the magnitude of that burden.
According to WalletHub, the median household in Illinois pays more in combined state and local taxes than anywhere else in the country — and it’s not even really that close.
The new analysis released this week at WalletHub.com concludes that Illinois families pay nearly 15 percent — 14.89 percent, to be exact — of their incomes to state and local governments. That amounts to about $8,300 per household annually.
Families in the next-highest tax state in the U.S., Connecticut, contribute more than a full percentage point less — 13.85 percent — of their incomes to their state and local governments, averaging $7,720 per household, a difference of $580 per home annually.
For some more perspective, state and local governments in the six most tax-friendly states — Alaska, Delaware, Montana, Nevada, Wyoming and Tennessee — ask their families to contribute less than $4,500 annually. That’s almost half of what Illinois’ state, cities, townships and other forms of government demand for comparable services.
As a result of our crushing tax burden, Illinoisans are fleeing the state in droves. According to U.S. Census data, Illinois has lost population each of the past four years, with the total declines increasing each year. High taxes is the top reason cited by those moving elsewhere.
The Wall Street Journal reported recently that Illinois lost $4.75 billion in adjusted gross income to other states in the 2015 tax year as a result of the outmigration, which also contributed to the state’s nearly stagnant economic growth — just 0.9 percent since 2012.
Considering the data and potential impact that taxes have on voters, one would think candidates running for statewide office would be campaigning on platforms to reduce Illinoisans’ overall tax burden.
While some are, the three leading Democrats running for governor want to raise taxes even further in the state.
Billionaire J.B. Pritzker, multimillionaire Chris Kennedy, and state Sen. Daniel Biss all say they want to change Illinois’ constitution to allow for a graduated income tax system. The constitution currently mandates a flat income tax, meaning all wage earners pay the same rate (with some exemptions) regardless of how much they earn. The General Assembly last summer raised that flat income tax rate to 4.95 percent from 3.75 percent, resulting in a $5 billion increase in revenue annually to fund state government.
But that’s not enough, according to Pritzker, Kennedy and Biss. If a graduated income tax rate is approved, that top end 4.95 percent rate could jump to 7, 8, 9 or who knows what percent. We simply don’t know how high because the candidates themselves aren’t saying what they’d propose.
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Poster Comment:
I got out of Illinois 20 years ago and I am glad I did.