According to the Internal Revenue Service, in 2015-2016 Illinois experienced roughly $5 billion in net income outflow, $2.5 billion from Cook County alone. The average household income of the households leaving Illinois was $82,000 per household compared with a median household income in the state of about $60,000. In other words richer Illinoisans were more likely to leave the state than poorer ones.
That translates to something like a $200 million decrease in state income tax revenue between 2014-2015 and 2015-2016.
There are lots of reasons for taxpayers fleeing Illinois—the climate, other states have nicer scenery, there are places where the cost of living is lower and incomes aren’t a great deal lower. But big reasons are taxes, the regulatory environment, and the state’s lousy fiscal condition.
Illinois can’t tax its way out of those problems.
Compare median to median or average to average. The average income in Illinois is likely well above $60,000 per year, so the difference is less than indicated.
I would, however, believe that those leaving are somewhat richer than those staying, because they have more options.
Average income in Illinois is around $77,000 so you’re right. You’re also right of course about averages and medians. Since this is a blog post rather than a doctoral dissertation, I used the figures that were easy to get and average household income took a bit of digging. There are other issues with the figures as well.
The point remains. The people who are leaving have above average incomes and rising taxes are a likely explanation.
“The point remains. The people who are leaving have above average incomes and rising taxes are a likely explanation.”
A point I’ve been making for some time. And yes, setting aside attempts at false precision, I, at least, am talking about people with $150,000 – $250,000 incomes. This is a big problem, and a shame.
I suspect the pols will continue to to attempt to tax the problem away. That’s the addicts way. Further, I really don’t think the Rhambos and Madigans care, nor do the N Shore, Oak Park and city dweller crowd. They are just fine. The rest? Let them eat cake.
Well. Well. Well. What have we here.
https://www.zerohedge.com/news/2018-01-05/americans-are-ditching-these-five-states-record-numbers
In fairness it’s actually more complicated than that. Illinois isn’t a high tax state. It used to be a low tax state and is now in the middle of the pack.
Increases in taxes, not just high taxes, tend to impel people to leave. And the failure of political leaders to deal with problems productively will push people out, too. I think that’s the situation in Illinois. Not only is the legislature raising taxes, it’s doing so without any program for reducing the need to raise taxes. The new revenue doesn’t resolve the problem. It just kicks it down the road a bit.
For Illinois after you get past the top two destination states for those leaving (Florida and California), the next five biggest destination states all adjoin Illinois: Wisconsin, Iowa, Missouri, Indiana, Michigan. Basically, Illinois doesn’t need to be a low tax, low regulation state but it does need to be competitive with its neighboring states.
A wicked problem is like a nesting doll. Opening one reveals another inside that wasn’t apparent until you’d already opened its predecessor. And again and again.
That wasn’t the situation in Afghanistan. The problems were always apparent. The Powers-That-Be just refused to accept them. We’ve always had multiple alternatives for dealing with it. We have been able to leave since we invaded 17 years ago.
Or we could become the occupying power, determined to stay there and colonize the place forever, subduing the country the way Alexander did—by supplanting its population. Who would stop us? Other than ourselves?
We’d rather hunker down and admire the problem than solve it.
I don’t think it was intended; but yes, from the description it sounds like Illinois is a ‘wicked’ problem.