Regardless of Income, Illinoisans Have Among the Highest Tax Burden

Regardless of Income, Illinoisans Have Among the Highest Tax Burden

ILLINOIS (IRN) — No matter how much you get paid, Illinois has among the highest taxes in the nation, according to a new report.

Consumer finance website WalletHub ranked Illinois No. 50 for low-income earners and No. 49 for middle- and high-income earners for taxes out of 50 states and Washington D.C.

WalletHub Analyst Jill Gonzales said the study looked at all taxes.

“Sales and excise taxes, property taxes, income taxes, Illinoisans get hit pretty hard when it comes to both property and income taxes,” Gonzales said.

Americans For Prosperity Illinois State Director Andrew Nelms said the study isn’t a surprise to anyone who is paying Illinois’ taxes.

“This is just the most recent re-affirmation of what we already know that people in Illinois are taxed too much and the solution to Illinois’ tax problem isn’t more taxes,” Nelms said.

Nelms said Illinois’ high taxes, not the weather, is the reason the state leads the rest of the country in outbound migration.

The Wallethub report found low-income earners pay around 13 percent in state and local taxes. Middle- and high-income earners pay around 11 percent.

Gonzales said that shows Illinois’ overall taxes put a greater burden on lower-income earners.

“One thing that is obviously on the table for Illinois right now is that progressive tax rate,” Gonzales said. “Instead of the flat income tax of 4.95 percent going over to a more progressive rate … I think that will have better rankings when it comes to lower and middle income earners. Higher income earners may not be that big of a fan.”

House Majority Leader Greg Harris, D-Chicago, said that bolsters plans to change the state’s flat income tax to a progressive system with higher rates for higher incomes.

“We need to begin shifting the burden of paying for public services off low-income families and working families and on to the wealthier,” Harris said.

State Rep. Tim Butler, R-Springfield, said a progressive tax structure is not the answer. He said all Democrats in Springfield can talk about is more taxes.

“Whether it’s a tax on healthcare, whether it’s amending the constitution to raise your income tax, whether it’s a plastic bag tax, we’re talking about all sorts of taxes on the people of Illinois,” Butler said. “We need to take a look at this and really reign in spending and then reign in taxes in Illinois so that we have more people moving back to Illinois.

Gonzalez said the report didn’t look at business taxes, only at what individuals pay in overall taxes.

A similar WalletHub report released last year put Illinois at No. 51 for overall tax rates.

The nonpartisan Tax Foundation has said Illinois’ flat tax is a positive for Illinois when it comes to businesses. Many small business owners file as individuals. If the flat tax were to change to a progressive tax with higher rates for higher incomes the Tax Foundation said Illinois’ business tax ranking would likely decline.

Last month WalletHub released a report showing Illinois had the second-highest property taxes in the country. That was a repeat from the year before.