Illinois should have low tax rates, due to its inherited good fortune and historically large tax base. Back before Illinois was captured by the hard left, its greatest city, Chicago, developed into one of America’s most prosperous industrial, financial, and commodities centers. Even today, Chicago is one of the world’s top ten financial centers. Back in 1950, over 40% of all people in Illinois lived in Chicago, and over half lived in Cook County, which includes Chicago.
But today, high levels of wasteful spending and public employee pensions have resulted in high sales tax rates in places like Cook County, which has a minimum sales tax rate of over 10%. In most Illinois counties, the sales tax rate is also rather high:
The latest Tax Foundation report on sales taxes details how Illinois is now home to the highest combined state and average local sales tax in the Midwest.
Illinois’ combined state and local sales tax rate of 8.85% placed the Land of Lincoln at No. 7 nationwide in 2024. That’s up from the No. 8 spot the prior year, also with a rate of 8.85%.
Illinois state Rep. Blaine Wilhour, R-Beecher City, said the report shows how the state is going in the wrong direction.
“We’re a fiscal mess,” Wilhour told The Center Square. “That’s what it says about our state. We have unsustainable spending in our budget and our taxes are going to continue to rise. Number one, we got over 7,000 units of government and they’re all taxing and they’re all taxing way too much.”
Researchers with the Tax Foundation say the state’s combination of a state sales tax of 6.25% along with an average local sales tax rate of 2.61% also make it home to the highest state and average local sales tax rate in the Midwest….Wilhour said he fears things may get worse before they get better.
“Every year in the General Assembly, we enhance pensions, we create more government, we create more bureaucracy, all of which cost taxpayers,” he said. “We need to streamline government. We need to cut government with smart consolidations and we need to fix our pension system. Until we do those things, there’s no chance of lowering taxes significantly in this state.”
Moreover, “A new study confirms what most Illinoisans already know, the property taxes in the state are among the highest in the nation,” reports Center Square:
The personal finance website WalletHub ranked Illinois 50th for real estate property taxes. Of the 50 states and the District of Columbia, only New Jersey ranked lower.
The study shows the average American household spends $2,869 on property taxes for their homes each year, but researcher Cassandra Happe said it is much higher in Illinois.
“The median home value is $239,100, and that comes out to $5,055 in real estate taxes every year,” said Happe.
Happe said Illinois is one of only three states with an effective property tax rate over 2%.
State Sen. Jason Plummer, R-Edwardsville, said to make matters worse, Gov. J.B. Pritzker wants to raise taxes as outlined in his budget proposal.
“Illinois is already the most overtaxed people in the country,” said Plummer. “We have the largest tax burden of any state, and just piling onto that with more taxes and more taxes.”
The three states with the lowest property tax rates are Hawaii, Alabama and Colorado.
The study showed that on average, “red” states, where Republicans control state government, imposed lower real estate property taxes than “blue” states, where Democrats are in control.
“Americans who are considering moving and want to maximize the amount of money they take home should take into account property tax rates, in addition to other financial factors like the overall cost of living, when deciding on a city,” said Happe.
Neighboring Indiana is poorer than Illinois through no fault of its own, since it contains no big financial center like Chicago in its borders, and suffered worse from the de-industrialization of the past. Yet Indiana manages to provide better government services than Illinois, for less taxes paid per resident. If you file a tax return with Indiana, it is processed much faster with fewer potential errors than a tax return in Illinois. Indiana has much less of an unfunded pension problem, and steals much less of its residents’ property through civil asset forfeiture and abusive fines and fees than Illinois — and especially Chicago.
“Illinois’ public pensions are worst funded in U.S.,” noted the Illinois Policy Institute. Bloomberg News reported a year ago that the “unfunded pension liability across Illinois’s five retirement systems rose 7.5% to $139.7 billion in the fiscal year that ended in June, based on the market value of their assets, according to a report from the Illinois Commission on Government Forecasting and Accountability on Thursday.”
Illinois is showering taxpayer money on left-wing public-employee unions that help elect Democrats. When Illinois began paying illegal aliens’ healthcare costs, it cost far more than the state expected, and it had to cap the number of illegal aliens it covered, to keep spending down to $550 million rather than rapidly increasing to over $1 billion.
