Illinois Senate Proposes Income Tax Hike in the Face of Record Out-Migration and Wealth Flight

No state has more out-migration than Illinois. Out-migration! For anyone who might not understand the Illinois Republican Party, in other words, what is wrong with Illinois — this article can explain it to you. Here is Michael Lucci writing at the Illinois Policy Institute:

The Illinois Senate’s proposed budget plan would raise the personal income tax rate to at least 4.95 percent with no real reforms to address the state’s skyrocketing debt and unsustainable spending. This proposal comes despite Illinois’ loss of $14 billion in annual income and hundreds of thousands of people in the wake of the 2011 income tax hike.

Illinois taxpayers are leaving in droves, and Senate leaders are pushing a budget plan that will drive out still more people from the state.

Illinois’ population is shrinking. The Land of Lincoln lost one Peoria’s worth of people to other states in just the past year. People with higher incomes are leaving for other states, and Chicago is experiencing a millionaire flight that is happening nowhere else in the United States.

And Illinois Senate leaders are proposing to make all of this worse. Their original plan was to raise the personal income tax rate by 32 percent. Now reports note that the rate could go even higher, with as much as a 40 percent income tax hike on the table. With no meaningful spending reforms in the discussion, Illinois’ personal income tax rate could hit an all-time high of 5.25 percent.

If the proposal is structured like the income tax hike legislation introduced earlier in January, the law will be retroactive to the beginning of 2017. Anyone with plans to leave Illinois this spring would effectively pay a border tax of hundreds or thousands of dollars on the way out the door.

Here’s a review of what happened in the years following 2011, the last time Illinois raised its income tax rate without reforming any structural spending drivers…

Read more: Illinois Policy Institute

Image credit: The Illinois state capitol building / Shutterstock.