Many people are perplexed why are people fleeing Illinois like never before in history. Illinois is a great place to live and raise a family but a bad place to live when it comes to your financial security and future stability. Illinois is in financial trouble. Never in history has Illinois had such a budget shortfall. The pension system is in dire debt with a $241 billion shortfall. Property taxes in Illinois ranks as second in the nation right behind New Jersey. Experts expect Illinois property taxes to surpass New Jersey by late 2023. John Strange a long-time loan officer at Gustan Cho Associates and lifelong Chicagoan said the following:
Homeowners fear property taxes will keep on going up. Many retirees who have no mortgages on their homes can no longer afford to keep their homes due to increasing property taxes.
What John Strange said is so true and to the point. With high property taxes comes a drop in home values For example, in DuPage County Illinois home values dropped 24% since the 2008 Great Recession while property taxes went up 7%. Other states like Florida, Texas, Tennessee, and Kentucky are raking in billions in revenues and home values have been increasing double-digits or more every year since 2012. In this article, we will cover the Age And Income Group Of Illinoisans Fleeing Illinois.
Why Are People Fleeing Illinois? Skyrocketing Taxes
Why are people fleeing Illinois? Too many reasons to list in this blog. However, one of the top reasons for the FAQ on why people are fleeing Illinois i s due to incompetent politicians who are clueless about running the government. Governor J.B. Pritzker and Illinois politicians think the only group of Illinoisans leaving the state is retirees who want to migrate to warmer weather states like Florida.
Pritzker and Illinois political leaders seem they are in a state of denial. Increasing taxes does initially generate revenues. It needs to be two-fold. Increase taxes and cut spending. However, it can backfire on politicians
Governor J.B. Pritzker, Mayor Lori Lightfoot, and countless other Illinois politicians are resorting to not just increasing taxes but creating new taxes. One thing they do not understand is many Illinoisans started to leave the state due to the high taxes. Pritzker is aggressively pushing to replace the state’s flat tax system with a progressive income tax plan. A progressive income tax system will hit the wealthiest taxpayers with more than a 60% tax increase.
Chicago Is The Highest Taxed City In The Nation
Chicago is no doubt one of the most beautiful cities in the nation. However, Chicago is also the most financially stressed city in the U.S. Chicago has the highest tax rates than any other major U.S. city. City taxpayers pay close to 11% in city, county, and state taxes. David Marden of Gustan Cho Associates expressed his opinion as follows:
Mayor Lori Lightfoot is planning on initiating massive property tax hikes in Chicago. However, many new taxes do not pass City Council. When asked about Illinoisans fleeing the state due to the high taxes and new taxes, Pritzker said he does not believe that. Pritzker believes Illinoisans will stay in Illinois due to the great amenities the state has to offer like great universities, the city of Chicago, the landscape, and many businesses
Data on migration numbers from the IRS, people of every age and income group are fleeing Illinois. Retirees who are seeking to spend their final years in a warmer weather climate are not the only taxpayers fleeing Illinois. The young, old, poor, middle class and wealthy are all among the Age And Income Group Of Illinoisans Fleeing Illinois.
How Illinois Is Losing Taxpayers And Businesses
All this talk about businesses and individual taxpayers leaving Illinois for other low-taxed states is not a rumor. There are multiple data suggesting that the exodus of Illinoisans to the state is a fact. Dale Elenteny, a senior loan officer at Gustan Cho Associates said the following:
The detailed breakdown below shows just how pervasive Illinois’ loss of people is. The 2012-2016 IRS data – 2016 is the latest year available – allows us to look at the in-migration and out-migration of Illinois tax filers. In every year and in every category, Illinois suffered net losses of tax filers vs. the rest of the country. The IRS data groups the age of tax filers into six categories, ranging from “below age 26” to “ages 65 and over.
Please study the chart below: The confirmed numbers and data also include filer income categories, ranging from“$25,000 and below” to “$200,000 and above.”
There is a net loss of taxpayers in Illinois. This net number of taxpayers in Illinois seems to be declining as years passed. During the years between 2012 and 2016, the state increased 466,000 new tax filers due to new Illinoisans moving to the state.
A total of 627,000 Illinoisans left the state. This yields a net loss of 161,000 taxpayers. Taxpayers leave with their dependents. If you count dependents leaving with taxpayers, a total of $330,000 people fled Illinois.
Dale Elenteny continued: In all, the state lost more than $18.5 billion in net AGI due to so many people leaving over those five years.
Incompetent Politicians Top Why Are People Fleeing Illinois
All the state increases in the world will not solve the state’s budget crisis if you have taxpayers leaving in droves like we are currently witnessing.
The state is in a downward spiral. The only solutions state and local political leaders have is increasing and implementing new taxes.
Tax increases are stirring anger among Illinoisans and many either are leaving and/or are thinking of leaving Illinois. This is a developing story from Gustan Cho Associates. We will update this story in the coming days and weeks. Stayed Tuned!!!