Illinois has the Twenty-First Highest State and Local Tax Burden in the Nation for FY 2016

Mar 28, 2018

In Fiscal Year (FY) 2016, Illinois collected $70.5 billion in state and local taxes—or $5,491 for every man, woman, and child. While this is an impressive sum of money, it tells us little about whether or not the average Illinois taxpayer can afford this level of taxation?

To better answer this question, this analysis will calculate New York’s tax burden relative to the private sector. Ultimately, it is the private sector that creates new wealth and income. A high tax burden means a state is hobbling its private sector relative to other states and reducing their long-run economic growth potential.

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

Unfortunately for taxpayers, as shown in Chart 1, Illinois’s state and local tax burden (tax collections divided by private sector personal income) was the twenty-first highest in the nation for FY 2016 at 14.4 percent—or 1 percent above the national average of 14.3 percent.

Chart 1 Illinois State and Local Tax Burden FY 2016.jpg

#Illinois state and local #taxburden in FY 2016 was the 21^st highest in the nation at 14.4%— 1% above US average of 14.3% http://bit.ly/2FX9C8F @keypolicydata #ILpol #ILleg #ILsen #ILgov #PolicyData (click to tweet)

As shown in Chart 2, Illinois’s tax burden has increased over time by 108 percent to 14.4 percent in FY 2016 from 6.9 percent in FY 1950.

Chart 2 Illinois State and Local Tax Burden by Type of Tax FY 1950 to 2016.JPG

#Illinois state and local #taxburden has increased 108% between FY 1950 (6.9%) to 2016 (14.4%) http://bit.ly/2FX9C8F @keypolicydata #ILpol #ILleg #ILsen #ILgov #PolicyData (click to tweet)

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

As shown in Chart 3, Illinois’s 14.4 percent tax burden is greater than these combined industries: manufacturing (10.9 percent), educational services (2 percent), and utilities (0.8 percent).

Chart 3 Illinois State and Local Tax Burden vs. Major Industry FY 2016.JPG

#Illinois state and local #taxburden > manufacturing, educational services, and utilities http://bit.ly/2FX9C8F @keypolicydata #ILpol #ILleg #ILsen #ILgov #PolicyData (click to tweet)

Illinois’s higher than average state and local tax burden is driven by a significant corporate income tax burden (0.7 percent, 10^th highest), and property tax burden (5.6 percent, 9^th highest) which is partially offset by other lower taxes such as the individual income tax burden (2.8 percent, 15^th lowest) and the sales tax burden (2.4 percent, 12^th lowest).

Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Illinois—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.

The 20 Illinois counties with the highest local government tax burden include:

DeKalb County, IL (11.1 percent)
Jackson County, IL (10.1 percent)
Kane County, IL (9.6 percent)
Ogle County, IL (9.3 percent)
Stark County, IL (8.7 percent)
Grundy County, IL (8.6 percent)
Jo Daviess County, IL (8.2 percent)
Mason County, IL (8.0 percent)
Alexander County, IL (8.0 percent)
LaSalle County, IL (7.9 percent)
Champaign County, IL (7.9 percent)
McDonough County, IL (7.7 percent)
Rock Island County, IL (7.7 percent)
Winnebago County, IL (7.6 percent)
Livingston County, IL (7.6 percent)
Lee County, IL (7.5 percent)
McHenry County, IL (7.4 percent)
Carroll County, IL (7.4 percent)
Cook County, IL (7.4 percent)
De Witt County, IL (7.3 percent)

The 20 Illinois counties with the lowest local government tax burden include:

Macoupin County, IL (4.0 percent)
Effingham County, IL (4.0 percent)
Monroe County, IL (3.9 percent)
Richland County, IL (3.9 percent)
Franklin County, IL (3.7 percent)
Shelby County, IL (3.7 percent)
Clinton County, IL (3.7 percent)
Pope County, IL (3.6 percent)
Wabash County, IL (3.5 percent)
Washington County, IL (3.3 percent)
Perry County, IL (3.3 percent)
Wayne County, IL (3.3 percent)
Moultrie County, IL (3.2 percent)
Cumberland County, IL (3.1 percent)
Gallatin County, IL (2.9 percent)
White County, IL (2.8 percent)
Lawrence County, IL (2.7 percent)
Edwards County, IL (2.7 percent)
Hamilton County, IL (2.5 percent)
Hardin County, IL (2.5 percent)

Chart 4 Illinois Local Tax Burden by County FY 2016.JPG

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 66 years! See if your state has been above or below the national average?

J. Scott Moody

Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.