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Analysis shows Illinois has highest taxes in nation
Illinois now has the dubious honor of having the highest taxes in the United States.
By Kevin Bessler · 2021-03-10T19:06:01+00:00
By Kevin Bessler | The Center Square The Center Square – Illinois now has the dubious honor of having the highest taxes in the United States.
A new analysis by WalletHub compared the 50 states across three components of state local tax burdens: individual income tax, property tax and sales and excise tax. Illinois ranked 50th overall, meaning it has the highest total tax burden in the nation at 14.94%.
New York followed Illinois at 14.75%, while Connecticut, California and Nebraska rounded out the top five highest tax burdens. Alaska had the lowest tax burden in the country at 5.10%.
The study found that the average American taxpayer pays $5,739 in state and local taxes annually. In Illinois, that number is significantly higher.
WalletHub analyst Jill Gonzalez said Illinois’ property taxes are a main driver.
“Illinois is consistently at the top of these rankings, mostly because of its property taxes, which are the second highest in the country,” Gonzalez said. “When you combine those with income taxes and sales taxes, it really creates a burden that is unmatched across the U.S.”
The study notes that while high taxes can lead to better public services, they can also drive residents away. Illinois has seen population declines for several consecutive years.
“What we’re seeing in Illinois is that residents are voting with their feet,” Gonzalez said. “They are leaving the state in search of lower tax burdens, and that creates a vicious cycle where the remaining residents have to pay even more to cover the cost of government services.”
The study also highlighted that the tax burden is not distributed evenly. Lower income households in Illinois often pay a higher percentage of their income in taxes than higher income households, largely due to the regressive nature of property and sales taxes.