Illinois has highest combined sales tax burden in Midwest, seventh-highest in U.S.

Illinois has highest combined sales tax burden in Midwest, seventh-highest in U.S.

Illinois politicians burden the state’s residents with the highest combined state and average local sales tax rate in the Midwest, along with numerous other taxes and fees.

Illinois’ combined state and average local sales tax rate ranks highest in the Midwest, according to a new report from the nonpartisan Tax Foundation. Currently, the average combined sales tax burden imposed by state and local governments in Illinois is 8.64 percent. The Midwestern state with the second-highest average combined sales tax rate is Kansas, at 8.62 percent.

Illinois also has the seventh-highest combined sales tax rate in the nation, surpassing both New York and California.

The only states with higher average combined sales tax rates are:

  • Louisiana, 9.98 percent
  • Tennessee, 9.46 percent
  • Arkansas, 9.3 percent
  • Alabama, 9.01 percent
  • Washington, 8.92 percent
  • Oklahoma, 8.86 percent

Sales taxes are fundamentally regressive and hurt lower-income residents the most. And like property taxes, sales taxes also hurt middle-class people, making everything from a trip to the grocery store to holiday shopping more expensive. Yet, tone-deaf local governments in Illinois don’t seem to care; despite the harm that sales taxes inflict on lower-income residents, 20 separate units of local government in Illinois raised sales taxes at the start of 2017.

On top of high sales taxes, Illinois governments continue to hike other taxes and fees

Sales taxes aren’t the only way Illinois residents are getting nickel-and-dimed.

Local governments and agencies in Illinois, hungry for revenue, have been going back to the same taxpayers and demanding more. Chicagoans, who pay the highest combined sales tax rate of any major U.S. city, just saw a tax on plastic bags go into effect Feb. 1, which will make shopping even more expensive. Residents of Cook County, including Chicagoans, will also pay a new tax on soda and other sweetened beverages starting in July, which disproportionately will harm lower-income people.

Many Illinoisans are also seeing increased fees for certain services. The Chicago City Council in November passed an increase in parking fees at Midway and O’Hare airports as a way to plug holes in the city budget. Meanwhile, Metra has hit commuters with fare hikes across the board to raise revenue for backlogged capital projects. Metra hiked fees to fund the projects even though it has a history of mismanaging funds and has not made any serious effort to cut costs.

Sales taxes and other cash grabs by local governments and agencies across Illinois are hurting those who struggle the most.

And data suggest high taxes are driving Illinoisans out of the state. Polling from the Paul Simon Public Policy Institute lists Illinois’ high taxes as the primary reason working-age adults want to leave Illinois, with inclement weather a distant second. The Land of Lincoln has the worst out-migration rate in the Midwest, and from July 2015 to July 2016 lost over 114,000 residents on net to other states. Simply put, residents don’t want to pay Illinois’ high taxes anymore.

Rather than squeezing families and driving Illinoisans out of the state with ever-increasing taxes, politicians at all levels should look at reforming their own spending practices. The people of Illinois deserve that.

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