By: Ted Dabrowski and John Klingner
Two separate 50-state comparisons of state and local tax burdens released this week confirm Illinoisans pay some of the nation’s highest taxes.
WalletHub, the personal finance company, calculated that Illinoisans pay the highest effective tax rates in the country. A more comprehensive study by the Tax Foundation, a non-partisan think-tank, says Illinoisans pay the nation’s 10th-highest tax burden.
Either way, their findings validate what Illinoisans instinctively know: they’re overtaxed.
According to WalletHub, Illinois’ effective state-local tax rate is 15.01 percent. The median amount an Illinois household can expect to pay is $9,488 in taxes. Illinois beat out Connecticut, New York, Pennsylvania and Kansas to take the top-taxing position in the country.
At the other extreme are the low-tax states of Alaska, Delaware, Montana, Nevada, and Wyoming. Alaska is the lowest taxing by far. Its residents only face a tax bill of $3,700, almost three times smaller than the bill in Illinois. See WalletHub’s methodology here.
The Tax Foundation’s own model of state/local tax burdens ranks Illinois lower, but still in the top 10. The group calculates that Illinoisans pay 11 percent of their income to state/local taxes every year. The difference between the Tax Foundation’s findings and those of WalletHub’s stem from a difference in methodology.
The Tax Foundation’s ranking matches closely with a separate analysis by economist Leslie McGranahan of the Federal Reserve Bank of Chicago. She found that Illinois’ per capita taxes have consistently remained among or near the top 10 states (the 80th percentile) for the past 60 years.
The Tax Foundation’s study ranked states across a variety of taxes and fees. Its data shows Illinois ranks relatively high (18th-highest) in income taxes per capita and in the middle of the pack for sales taxes per capita (27th-highest). But the state’s gas taxes and property taxes are some of the nation’s highest.
Illinoisans now pay the 3rd-highest gas taxes in the nation, behind only California and Pennsylvania. The state and local governments in Illinois now charge more than 50 cents for every gallon of gas pumped.
Property taxes are, of course, Illinois’ most painful tax, and for good reason. The Tax Foundation ranks Illinois property taxes as the nation’s 2nd-highest behind only New Jersey. Illinoisans pay nearly 2 percent of their home value each year in property taxes. That’s more than double what our neighbors in Indiana and Kentucky pay.
A separate study by Attom Data Solutions ranks Illinois property taxes as the highest in the nation.
The WalletHub and Tax Foundation releases come just two weeks after Illinois’ new House Speaker Chris Welch suggested lawmakers try for progressive income tax for a second time. Illinois Gov. J.B. Pritzker’s first attempt failed at the ballot in November.
Welch wants higher income taxes to pay for pensions, but Illinoisans soundly rejected the first attempt because they simply don’t trust their politicians. Illinois lawmakers continue to ignore the structural reforms Illinoisans desperately need.
The two new reports give Welch another reason why Illinoisans don’t want a progressive tax: they’re already overtaxed.
Read more about Illinois taxes and their impact:
The arguments for tearing apart Chicago Public Schools and replacing it with a universal school choice program continue to pile higher. The system is an abject failure any way you cut it. 
Chicago may think it walled itself off from the issue, but the firestorm is only getting started. 
Neither Pritzker or Lightfoot can escape the reality that they’ve lost control over the city’s crime. One statistic that particularly captures their failure is Chicago’s homicide rate compared to that in big-city peers New York and Los Angeles. 
President Biden said the pandemic is essentially over, but Governor Pritzker issued his 34th Covid Disaster Proclamation. President of Wirepoints and the Steve Cochran Show talk about why Pritzker issued the proclamation, what the Federal Government is going to do about this, and if the Governor’s Office has too much power. 
You should factor in the level of mulcting in each state. Few can be as bad as Illinois, Chicago, and the counties around Chicago for mulcting the people to death.
An article that explains why the pensions will be cut for sure: https://www.forbes.com/sites/ikebrannon/2020/06/05/illinois-will-be-the-poster-case-for-state-bankruptcy/?sh=733f24093550
Unsustainable. Doomed.
I just wanted to point out that national debt is 28 trillion. When government controls the currency, manipulates the currency, they can/will screw every individual over to ensure the government doesn’t suffer consequences of decades of accumulated deficits.
Government doesn’t work for you– it works for itself.
Yes, Yes, all very depressing. So, we are in the same group as those New England Blue Bloods that pay stupid tax bills and get less and less and less. What do we get here in Illinois? More welfare class that we pay the money for them to be fed and housed better than we are. Illinois is a stupid state. Stupid leaders for decades who care only about themselves. The leaders have enriched themselves, gorged themselves on our carcasses. Tell every young person you meet to get the hell out of Illinois as fast as they can. Take this… Read more »
This has happened because Illinoisans have passively stood by while public employee unions have been coercing our politicians. Then the unions play the “hero” card with sophisticated PR campaigns to keep the Illinois voter thinking that these people are under compensated. In the last year or so, I think the mask has fallen off, and more than ever, people are aware that these public union people will demand every last cent out of the state and local treasuries. The public unions couldn’t care less anymore what anyone thinks of them; they want theirs and they’re going to use every bit… Read more »
As a young boy in Champaign I listened as my family would brag about the do nothing jobs they had at the University of Illinois in Urbana-Champaign and all the while making a good living at a job they worked maybe 4 hours a day at.
In Chicago the stories are famous of people clocking in on day jobs with the city and then running over to do an actual job somewhere else while getting paid on the city’s dime.
All a bunch of crooks
Many years ago (30-40?) I heard stories from friends and family who were employed by the Chicago Park District. The guys would do the bare minimum for about 4 hours in the morning–make the part-time help and rookies do whatever needed to be done–and then head over to the local tavern in XYZ neighborhood in Chicago. They would start this part of “the job” at 11am. They’d have lunch and then maybe…a few beers/drinks while on the clock. This turned into a daily exercise, to where 11am was pretty much the end of the day. No one snitched on anyone… Read more »
It’s obvious when I see 10 streets and sans guys standing around an open hole in the street and one dude is in the hole with a shovel.
Yup, while the others scratch there butts
I believe it would be appropriate to add in property devaluation to the tax cost. Perhaps that gets to the Wallet Hub number.
Lard A** with his fat hand out for himself and power.
I miss the good ole days when the Fair Tax team would continuously ignore the fact that, even if it passed, Illinois would still have one of the highest tax burdens in the nation for working families.