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 Taxes take a larger chunk out of
Illinoisans’ incomes than residents of all bordering states, according to data
from the U.S. Census Bureau.
Microdata from the Current Population Survey show Illinoisans paid the largest
share of their income in property taxes, state taxes and the federal income tax,
even after including all tax credits.
From March 2015 to March 2016, Illinoisans saw 31.1 percent of their income flow
toward income and property taxes each year, compared with 28.7 percent for
Wisconsinites, 25.1 percent for Michiganders, 24.6 percent for Iowans. 23.3
percent for Indianans, 23.1 percent for Missourians and 21.1 percent for
Kentuckians.
Said another way, Illinoisans kept
only 68.9 percent of their income after taxes, compared with 71.3 percent for
Wisconsinites, 76.7 percent for Indianans, 76.9 percent for Missourians, 78.9
percent for Kentuckians, 74.9 percent for Michiganders and 75.4 percent for
Iowans.
Keep in mind that this data on Illinoisans’ tax burden does not take into
account the largest permanent income tax hike in state history, which state
lawmakers passed this summer. Illinoisans can look forward to having an even
smaller share of their incomes available after taxes.
Who’s paying?
The same data show Illinoisans who earn more see a larger share of their income
go toward taxes.
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Despite a flat income
tax, the higher-earning half of Illinoisans – those with an average
personal income above the median state income – kept 74.2 percent of
their income, compared with 75.5 percent for those with a personal
income below the median income in the state.
In terms of age, Illinoisans older than 65 bear the largest burden
of state and federal tax policies – keeping less of their income
after property and income taxes than Illinoisans age 25 to 39 and
Illinoisans between the ages of 40 and 64.
An ever-growing burden
Despite Illinoisans seeing the worst personal income growth in the
nation over the recession era – and Illinoisans seeing a larger
share of their incomes flow to income and property taxes than
residents of any surrounding state – lawmakers were bold enough to
pass a 32 percent income tax increase in July 2017.
Meanwhile, Illinoisans cite high taxes as the No. 1 reason for
wanting to leave the state.
Rather than seeking to take even more money from taxpayers,
officeholders should be working to prevent further tax increases
from swallowing up more of Illinoisans’ weak income growth. Doing so
requires comprehensive spending reforms as well as pro-growth
economic reforms to grow the state’s tax base, rather than hitting
up tapped out taxpayers again and again.
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