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Illinoisans' state and local taxes top the nation at $8,300 per household

Illinois Watchdog.Org

Wednesday, March 14, 2018  |  Article  |  By Cole Lauterbach

Economy (34) , Taxes, misc. (89) , Taxes, property (87) McCarter, Kyle--State Senate, 54
Illinoisans shoulder the heaviest state and local tax burden in the nation, according to a report released Tuesday by financial site WalletHub.In the site's annual ranking of taxpayer burden by state, WalletHub found that Illinois households spend 14.89 percent of annual earnings to pay state and local taxes. That comes out to $8,299 per median U.S. household. They pay federal taxes on top of that.

This is the second consecutive year that Illinois has been ranked 51st in the nation in WalletHub's study. In terms of overall taxes, Illinois was followed by Connecticut (50), Nebraska (49), New York (48) and Rhode Island (47). The state's with the lowest overall taxes were Alaska (1), Delaware (2), Montana (3), Nevada (4) and Wyoming (5). The study looked at all 50 states and Washington, D.C.

Illinoisans pay about $8,300 per home in state and local taxes. Residents in Connecticut, which finished second highest to Illinois, pay about $7,720 per household annually. Alaskans, with the lowest tax burden, pay $3,164.

The latest report comes after a $5 billion income and corporate tax hike in 2017, but the report appears to have based its income tax rankings on 2014 numbers, when the tax burden was still 5 percent.

Illinois' worst-in-nation ranking is in terms of median U.S. households and assumes a number of income and spending characteristics, including an annual income of $55,754 and a median U.S. home value of $184,700, according to WalletHub.

The biggest reason for Illinois’ high tax burden was property taxes.

"You’re paying a high property tax on property that is already increasing [in value],” WalletHub analyst Jill Gonzalez said. “Unfortunately, it’s only gotten worse."

Illinoisans seem to be voting against the high taxes with their feet.

“All too often, customers come in and say that they’re leaving,” said Bob Anderson, a Wonder Lake barber and McHenry Township trustee who has spent decades advocating against township government. “They can’t pay the property taxes anymore.”

State Sen. Kyle McCarter, R-Lebanon, wasn’t surprised by the ranking.

“If we don’t bring down the burden of government on the people, they will leave,” he said. “Our problems don’t begin with not taxing people too much. It’s because we’ve spent too much in the state of Illinois.”

Meanwhile, wages in the Prairie State are stagnant.

According to the Bureau of Economic Analysis, Illinois' wage growth as of Q3 in 2017 was only .6 percent. This could be because many Illinoisans aren't working. A February report by Moody's said Illinois is at a 40-year low for workforce participation.

The report comes a week before Illinois' gubernatorial primary election. The leading Democratic candidates for governor are calling for a change to the state's constitution to allow for a progressive income tax in which higher wage earners would pay higher rates.