Illinois taxes are not low when entire picture is seen

In her recent opinion piece, Innovation Illinois’ Elizabeth Austin misrepresented the facts in order to claim Illinoisans don’t pay high taxes: “My View: Illinois OK when right tax info is compared.” As the state budget battle wages on, it’s important for taxpayers to be armed with accurate information. Austin claimed that so far in the...

In her recent opinion piece, Innovation Illinois’ Elizabeth Austin misrepresented the facts in order to claim Illinoisans don’t pay high taxes: “My View: Illinois OK when right tax info is compared.” As the state budget battle wages on, it’s important for taxpayers to be armed with accurate information.

Austin claimed that so far in the first six months of 2015, state tax collections in Illinois are $60 lower per person than in Wisconsin. But Illinoisans pay a lot more than just state taxes; one cannot claim that taxes are low in the state without also looking at the local tax burden residents face.

The local, per capita tax burden in Illinois is $2,369, according to the latest data available from the State and Local Government Finance arm of the U.S. Census Bureau. Meanwhile, in Wisconsin, the local per capita tax burden is just $1,928. In Indiana, it’s nearly half of Illinois’ burden at $1,216. In her piece, Austin also omitted why this is: an excessive number of government bodies in Illinois.

While Wisconsin has just 3,128 taxing bodies, Illinois has almost 7,000. Indiana has just more than 2,700 taxing bodies. Leaving out the tax burden faced by residents because of Illinois’ 7,000 units of local government is unacceptable for an article titled “Taxes in Illinois aren’t that bad” or “Compared with neighbors, Illinois isn’t a high-tax state.”

Austin also incorrectly described Illinois as having a “regressive flat income tax rate.” This is a contradiction in terms — a tax rate cannot be both regressive and flat. Since Illinois’ income tax rate is flat, everyone pays the same rate on all taxable income.

Whether your income is $50,000 annually or $500,000 annually, you will pay 3.75 percent of your taxable earnings in state income taxes. Under this system, higher earners cover an out-sized portion of the state’s income tax bill, according to data from the Illinois Department of Revenue. In tax year 2013, the top 0.8 percent of taxpayers covered 21 percent of all income taxes collected in Illinois, while the top 17 percent of earners paid 62 percent of all income taxes collected in Illinois.

Finally, Austin also omitted why she and her organization, Innovation Illinois, seek to obscure the facts on Illinoisans’ tax burden: They’re laying the groundwork for yet another massive state tax increase. Austin and others at Innovation Illinois are veterans of former Gov. Pat Quinn’s administration.

This is the administration that, following an economic recession, raised taxes on every Illinoisan. The Quinn administration ran budget deficits and borrowed money instead of enacting the reforms Illinois needed to put its fiscal house back in order.

There’s nothing innovative about this tax-without-reform approach; it’s precisely what got Illinois into the fiscal and economic mess it is in today.