Illinois’ low status on tax climate report not a surprise to some

[December 04, 2023]  By Glenn Minnis | The Center Square contributor

(The Center Square) – The state of Illinois recorded its lowest index score for tax climate over the past ten years in the latest Tax Foundation State Business Tax Climate report.

Wirepoints President Ted Dabrowski said he could have predicted Illinois’ record poor showing.

“Illinois leadership continues to ignore how important companies and businesses are to creating jobs and generating tax revenues,” Dabrowski told The Center Square. “We continue to disrespect them. We charge them the highest tax rates in the country, in particular property taxes, and that continues to eat away at companies' ability to make money and invest more in their businesses.”

Using a system that favors business-friendly states and those that seek to minimize the tax load residents and corporations pay, researchers found that Illinois now has its lowest index score for tax climate in the past 10 years, falling to No. 37 in the country overall after ranking as high as No. 25 as recently as 2017.

Dabrowski argued all the trouble leads directly back to Springfield.

“The data tells us that we keep making it tougher for companies to do business here,” he added. “Our tax environment is not good and we rank towards the bottom of the country. Luckily, we have the flat [income] tax rate. If we didn’t have that, we’d be in a real mess. When a company like Boeing leaves, Caterpillar, Citadel, that’s a huge message and that message is they’re not being respected. They’re finding it easier to make money and be successful in other states than Illinois.”

The Illinois State Capitol
Greg Bishop / The Center Square

Dabrowski said he’s convinced things would be even worse if Gov. J.B. Pritzker had his way in regards to changing Illinois’ flat income tax to a progressive tax with higher rates for higher earners.

“Pritzker’s proposed progressive tax would have been disastrous for Illinois,” he said. “It would have attacked the people that are trying to be successful, companies trying to make more money and grow. We’re starting to see more states move away from graduated taxes toward a flat tax and many are moving toward zero tax. Pritzker’s plan would have been backwards.”

In the end, Dabrowski said he sees just one way for lawmakers to get the state back on track.

“It all has to do with reforming how we treat our citizens and our companies,” he said. “It starts with tax reform, making it more tax friendly. It starts with fixing the pension problem. We can’t have lower taxes as long as we have these pension problems and it starts with taking care of crime so we’re protecting our cities. We’re losing people more than any place in the country and as long as we’re losing people, there’s no reason for businesses to invest.”