Despite the claims of some government employees and pro-tax political activists that Illinois is a low tax state, the latest statistics from the non-partisan Tax Foundation, headquartered in Washington, D.C., show that Illinois is a high-tax state: Illinois, in fact, has some of the highest tax burdens in the nation (http://www.taxfoundation.org/research/show/336.html).
The Tax Foundation measures tax burden by taking taxes as a percentage of income. In 2000, Illinois combined state and local tax burden was 10 percent, ranking 30th in the nation. By 2004, Illinois state and local tax burden for state and local taxes had increased to 10.9 percent, the 14th highest in the nation. Only 13 out of 50 states had higher state and local tax burdens than Illinois in 2006.
When the federal tax burden is added to Illinois state and local figures, Illinois has the 10th highest total tax burden in the nation for 2006, 32.7 percent (taxes as a percentage of income).
Illinois economic growth and tax increases have resulted in a flood of taxpayer dollars pouring into state coffers. For Illinois Fiscal Year 2006, ending June 30, 2006, tax revenues were nearly $4 billion higher than FY2005. Illinois total state revenue growth was more than twice the 3.3 percent rate of price inflation for the same period (http://www.ntui.org/itef/ITEFComment12-3/index.html).
Unfortunately, in Fiscal Year 2006, the Illinois General Assembly and Gov. Rod Blagojevich were responsible for accelerating the growth of spending. Total state expenditures increased by a huge amount, $5 billion, nearly $1 billion more than revenuesa spending orgy that threatens the long-term financial health of the state.
Illinois is a high-tax state plagued by runaway spending. This is a deadly combination for individual taxpayers and businesses alike. The high state and local taxes, combined with the states irresponsible spending, is hurting its economy, driving small businesses out of state, and enriching government employees at the expense of productive workers in the private sector.
Reprinted by permission from ITEF Comment, Vol. 12, Issue 4, Aug. 9, 2006. Dennis Constant is research director of the Illinois Taxpayer Education Foundation (Web site: http://www.ntui.org/).
From the Aug. 23-29, 2006, issue