IPI: ILLINOISANS PAY 10TH HIGHEST LIFETIME TAXES IN U.S.
Illinoisans will pay the 10th-highest lifetime taxes in the nation – more than any other Midwest state, according to a new study.
Research from Self Financial Inc. estimated how much Americans would pay in taxes during their lifetimes: $525,037 was the average, or a little more than one-third of their lifetime earnings.
Illinoisans will pay $693,792. That is 43% of everything they will earn during their lives.
Illinoisans pay the highest lifetime taxes in the Midwest, almost double what they would pay if they lived in neighboring Indiana or Kentucky.
The states Illinoisans are moving to are asking their residents to pay hundreds of thousands less.
Texans pay about one-third less in lifetime taxes than Illinoisans. Floridians and Tennesseans pay a little more than half.
High taxes were the No. 1 reason nearly half of Illinoisans thought about leaving when the Paul Simon Public Policy Institute asked the question in 2016.
For the first time in 200 years, Illinois lost population in the once-a-decade U.S. Census, which will cost it another seat in Congress.
Illinoisans will pay $195,611 during their lives in property taxes. Move to either Indiana or Wisconsin and those property taxes will be about $125,000 less.
While those who leave Illinois can cash in, those who choose to stay or cannot leave will face ever greater burdens. Illinois politicians respond with higher rates, not by cutting the demands, and those higher tax rates prompt more prime working-age residents and businesses to leave for more competitive economies with lower debt obligations and stronger housing markets.
Illinois’ second-highest in the nation property taxes also discourage prospective Illinoisans from buying homes here. Illinois’ residential property taxes have grown 3.3 times faster than median household incomes since 1990. Total state property taxes outpaced population growth 14 times over since 1963.
This rapid growth in property taxes has been driven by state lawmakers’ need to meet exponentially increasing shortfalls in Illinois’ worst-in-the-nation pension crisis. State spending on pensions has mushroomed over 533% since 2000 while state spending on social services has dropped by nearly 15%.
As a result, a quarter of every dollar spent by the state in 2020 went to propping up Illinois’ pension obligations. That amount will increase to nearly 30% of the total state budget in fiscal year 2022.
Public pension reform received bipartisan support from state lawmakers and the governor in 2013, but a ruling in 2015 by the Illinois Supreme Court means the only way to achieve it for Illinois state and local governments is through a constitutional amendment.
Pension reform would allow control of future cost increases, ensuring a secure retirement for public employees. But more importantly, pension reform can stop Illinois’ taxes from pushing more residents to states that have their finances under control.