Monday, June 15, 2015

Illinois Faces Huge Economic Problems : Decades of Democrats

After decades of progressive socialist liberals controlling the state and driving into economic disaster, it will take a huge effort to correct the nightmare they left behind for the new Republicans governor.

Illinois' Wishy-Washy Taxes
Source: Greg Hinz, "Illinois taxes: The good, the bad and the out-of-date," Crain's Chicago Business, May 30, 2015.

June 3, 2015

As Springfield engages in a take-no-prisoners budget war, it may be helpful to offer some fiscal facts that actually could prompt a solution. They come from a nifty new report released a few days ago that, amid the nastiness between Gov. Bruce Rauner and legislative Democrats, did not get much attention but is worth a read.

Illinois has the highest sales tax rates in the Midwest, but per capita sales tax collections lag the national average. Property taxes are disproportionately high, as is the corporate income tax rate. But now that the temporary income tax hike that Pat Quinn pushed through has begun to drop, the overall state and local tax burden relative to income is pretty much back where it has been for most of the past 35-plus years: at or near the national average.

The income gap between rural and urban Illinois has widened. In the 1970s, the per capita annual income of residents of metropolitan areas was within a few thousand dollars of residents of non-metro areas. But the disparity has grown ever since, with per capita metropolitan income in 2013 roughly $47,000 a year, more than 50 percent higher than in nonurban areas.
Fast facts about the Illinois tax system include:
  • The average combined state and local sales tax is 8.19 percent, versus 5.43 in Wisconsin and 6.0 percent in Michigan.
  • Illinois sales tax collections are only about two-thirds of the national average.
  • Illinois sales tax applies to only 20 percent of the state economy.
  • Property tax makes up about 38 percent of combined state and local tax collections, compared with an average of 32 percent among other states.
  • In 2011, the Illinois income tax decreased to 3.75 percent from 5 percent.
 

No comments: