By: Ted Dabrowski and John Klingner
Illinois has a millionaire problem. A Wirepoints review of IRS tax filing data shows Illinois has suffered the nation’s 5th-worst growth of millionaire taxpayers over the 2010-2022 period.
Yes, Illinois doubled the number of tax filers reporting more than a million dollars in annual income since 2010 – the number of filers was up by 114% in 2022 – but much of that was due to the 40% inflation over the period. And even then, Illinois’ growth was only better than four other states.
Blame the Rust Belt if you want, but every one of Illinois’ neighbors grew their count of millionaire earners by far more than Illinois did. Missouri, up 160%. Kentucky, up 180%. Iowa’s number of millionaire filers was up 222% – double that of Illinois.
Even Michigan, with Detroit’s many problems, was up 211%. A state-by-state table with the actual number of filers is in the Appendix.
And what’s sure to prove just how mobile today’s millionaires are, look at the growth in millionaire earners in Utah, Montana and Idaho, up 360%, 410% and 418%, respectively.
In 2010, Illinois had just over 14,000 taxpayers with an Annual Gross Income above $1 million. By 2022, that number had grown to 30,000, up 114%.
Compare that to Florida. In 2010, it had just 19,500 millionaire tax filers. By 2022, the state had nearly 78,000, a near quadrupling.
Illinois, with Chicago as its financial engine, has long been considered a “high-income” state.
But that’s been changing as Illinois continues to lose many of its biggest earners to out-migration (see details here, here and here).
Illinois’ share of the nation’s millionaire earners fell to 3.8% in 2022, down from 5.0% in 2010. Only New York suffered a worse drop, falling to 8.7% from 12.7%. The Empire Center covered New York’s drop in detail here.
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The data above, in conjunction with other Wirepoints’ reporting on taxes, pension debts, joblessness and corruption, make it clear that Illinois’ failed policies of the past few decades are making the state increasingly uncompetitive.
It’s also a reminder of the little respect many in Illinois’ political class have for entrepreneurs, job creators and those successful enough to make a million dollars.
Read more from Wirepoints:
- Illinois drives out residents of every age and income group
- Illinois shouldn’t dismiss Indiana’s overture to snap up “separatist” downstate counties
- Illinois’ rich, young residents join the exodus to other states
- Chicago’s Mayor Johnson wants the ultra rich to ‘step up.’ They’re more likely to step out
Appendix.
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Many of the new millionaires are public sector pensioners. When you get a pension over $100,000 (many do) per year with 3% annual increases at age 45 to 50 you are a multi-millionaire.
Your description of a millionaire falls far short of the more usually accepted version—any person who has a net worth of a million dollars. Your version might reach that latter stage after multi-decades in retirement, but a million dollars of net worth usually takes multi decades to be achieved without additional income sources beyond anything remotely in the range of the usual governmental pension.
The Net Present Value of a large pension far exceeds one million dollars. Guess you must have gone to the CPS if you do not know this.
Sure, I know that concept. You are free to take that point of view, but how was any reader to presume that was your implied concept since you didn’t say so? Given that, an offensive jab to simply seems unnecessary as overkill.
I should add that the present value of a person’s pension may well exceed a million dollars, but you won’t find even a small percentage of such people drawing an annual pension anywhere under maybe $125,000 thinking of themselves as a millionaire. Again, a “millionaire” in standard terminology has to have a net worth of at least a million dollars rather than an income stream that may, or may not, reach that level. There is a huge difference in the meaning of their difference!
Dave Ramsey cites the not so infrequent case of two public school teachers being everyday millionaires. Ramsey’s point (unlike Illinois governments) is that controlling spending and investing is what is crucial. I know of teachers who worked summer gigs and banked every bit of the proceeds. Kudos to them. If I had a generous pension, it would change my behavior in terms of investing a bit more aggressively than I otherwise would. Not sure that is of any consequence from a policy perspective. The net worth figure matters far less in an income tax regime. The number of people with… Read more »
You seem to not understand the value of a guaranteed for life pension of $100,000. In the private sector, most will collect SS. AI assures me that only a small fraction of beneficiaries get $40k or more. Even for those who do, that leaves $60k from assets to make up the difference. At the recommended draw down rate of 4% per year to fund a 25 year retirement, a private sector worker would need to work until 65 and have $1,500,000 in assets. The $60,000 in income would not be guaranteed. Pensioners collecting $100k pensions may not be millionaires, but… Read more »
I can agree to all of that, but the fact remains you and others seem to purposely conflate your fanciful version of what it takes to be a millionaire probably for political purposes. The dictionary version won’t be your friend here. You need a net worth of a million dollars or more to be a millionaire!
You do not have a clue about money.
You would need approximately $2,265,000 today to purchase a 30-year annuity that starts at $100,000 per year, growing at 3% annually, using a 5% interest rate
Sure, I get that well enough, but by no means does that make a person a millionaire in terms of net worth unless his savings eventually accumulates to that value. If you want to extend the ridiculous argument you are making you can include a person in his late 20’s making maybe 60k a year and call him a millionaire with the same general set of assumptions. I’m sure the bank will give him a loan at preferential rates to buy his first Ferrari—not! Nope, he’s got to have a million dollars of net worth to be a millionaire. Nice… Read more »
At some point will you realize that “it’s just political” and “you just hate teachers” are meaningless?
Apparently not, so you’ll just have to deal with it. Feel free to make a psychiatric appointment if that will help.
A husband and wife each maximize their social security while working and decide to retire at 62. When they retire they would get $5350 combined each month. Using a discount rate of 7%, that means the net present value would be $678k. If they had no other savings and owned a 350k home without a mortgage, their net worth would put them into the millionaire status. Stop acting like a million in net worth is a some sort of big deal. A family of 4 that gets the maximum SNAP benefits, section 8 benefits and is on medicaid would be… Read more »
Of course I only pointed out that while the pensioner may not be a millionaire, he is collecting income as if he were.
No statement on what happens in a dual income home, whether the house is paid off, how far a million goes these days, nor anything about candy bars. I didn’t even mention that I prefer M&Ms.
Don’t fret so much about things not in your power to control. Soon enough hamburgers will be $100, and the number of people who are millionaires hopefully will rise accordingly to meet those expenses. If not you, maybe your children will all be millionaires. Praise the Lord and pass the money. Let the good times roll!
A million is not what it used to be. But if you left it up to a public sector worker they would be in debt at retirement age (67) and not have any net worth. So many do not have a CLUE about saving and investing money. Most are below average IQ’s. I say let them do what the private sector does, best of luck to them.
PPF – I feel like Wirepoints should give you credit for the idea on this article as you were just pointing in the comments section last week, in particular how IL was going to be fine financially since they were able to double those making more than $500K between 2010-2020.
Yes. However the article was done to make readers ignore the absolute increase in households earning more money and state they we are growing slower than other states. Which stands to reason considering our population growth. I’ve never disputed that we are growing slower than our neighbors and slower than we could if he hadn’t borrowed all the money by not paying into pension debt. I’ve merely pointed out that the state will continue to pay its bills.
>>>we could if he hadn’t borrowed all the money by not paying into pension debt.<<<
I have tried to beat this into people’s heads ever since Edgar started his so called ramp that many cheered as he did it. Even to this day people in Illinois can’t understand the simple mathematics of how compound interest works and too think…they can all vote.
It’s amazing how few people truly understand the numbers on this issue. The state is currently paying over 10 billion a year for pensions but should be paying 15 billion if they followed actuarial science instead of the Edgar ramp. However, if they hadn’t shorted pensions all these years the state would only need to pay about $3 billion per year. The true costs for pensions would be quite affordable.
Pensions are completely affordable for Illinois. It’s the debt and the continued borrowing that is crushing us.
Much less than that because everyone’s salaries would’ve been much lower because the money used to pay for higher starting salaries and subsequent raises would’ve gone to pensions instead, thereby leading to smaller pensions.
That’s why the pensions were shorted- to pay higher salaries to public employees.
There is substantial disconnect in your statement and that of LadyJ in that local governments pay local government employee salaries whereas IL as a state pays for public employee retiree pensions. Each surely thinks almost exclusively about their own level of expense rather than their combined expenses since they have no clearly strong motivation to think otherwise.
Are you trying to claim that the state of Illinois has no employees to whom the state pays a salary? Over 55,000 at last count.
You don’t mention that the politicians have historically refrained from imposing tax increases in amounts sufficient to properly pay pensions. Politically it would in many cases been virtually impossible. One need only observe Chicago’s reaction to a mere $300m proposed property tax increase. Johnson couldn’t come close to getting it done. And given the political and financial realities Chicago needs a lot more than $300m. The problem at hand with saying pensions are affordable is the issue is one of perception. My spouse works in the Virginia public schools and her pension, even with a self funded purchase of additional… Read more »
Well they could have not expanded spending on assorted vote buying programs.
If a defined benefit plans were ‘affordable’, then the private sector wouldn’t have ditched them for 401k’s back in the day.
Millionaires got out when the getting was good. We should all follow the money and leave
Taxpayers moving out of IL due to overtaxation and left politics.