October 17, 2018

Illinois: Who Pays? 6th Edition


ILLINOIS

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ILLINOIS STATE AND LOCAL TAXES

Taxes as Share of Family Income

Top 20%
Income Group Lowest
20%		 Second
20%		 Middle
20%		 Fourth
20%		 Next
15%		 Next
4%		 Top
1%
Income Range Less than
$21,800		 $21,800 to
$40,800		 $40,800 to
$63,800		 $63,800 to
$109,500		 $109,500 to
$231,500		 $231,500 to
$537,400		 over
$537,400
Average Income $12,400 $30,700 $51,700 $84,000 $150,800 $343,000 $1,704,500
Sales & Excise Taxes 6.8% 5.3% 4.2% 3.5% 2.6% 1.7% 0.8%
General Sales – Individuals 3.4% 2.9% 2.5% 2.1% 1.6% 1.1% 0.5%
Other Sales & Excise – Ind. 1.8% 1.1% 0.7% 0.5% 0.4% 0.2% 0.1%
Sales & Excise on Business 1.7% 1.3% 1.0% 0.8% 0.6% 0.4% 0.2%
Property Taxes 6.0% 4.4% 5.0% 4.5% 4.6% 3.8% 2.1%
Home, Rent, Car – Ind. 5.8% 4.2% 4.7% 4.2% 4.3% 3.2% 0.6%
Other Property Taxes 0.2% 0.2% 0.2% 0.3% 0.3% 0.6% 1.5%
Income Taxes 1.5% 2.6% 3.5% 3.8% 3.8% 4.0% 4.6%
Personal Income Tax 1.5% 2.5% 3.4% 3.7% 3.7% 3.8% 4.1%
Corporate Income Tax 0.1% 0.1% 0.1% 0.1% 0.1% 0.2% 0.4%
TOTAL TAXES 14.4% 12.4% 12.6% 11.8% 11.0% 9.4% 7.4%

Individual figures may not sum to totals due to rounding. Download the table

TAX FEATURES DRIVING THE DATA in Illinois

Progressive Features

Regressive Features
  • Provides a refundable Earned Income Tax Credit (EITC)
  • Provides a non-refundable property tax credit
  • Personal exemption is targeted to low- and middle-income taxpayers
  • Requires the use of combined reporting for the corporate income tax
  • Levies a state estate tax
  • Personal income tax uses a flat rate
  • Comparatively low-income tax exemptions
  • All retirement income is exempted from the personal income tax
  • State sales tax base includes groceries, though taxed at a lower rate
  • Local sales tax bases include groceries
  • Fails to provide a property tax “circuit breaker” credit for low-income taxpayers

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, which measures the impact of each state’s tax system on income inequality, Illinois has the 8th most unfair state and local tax system in the country. Incomes are more unequal in Illinois after state and local taxes are collected than before. (See Appendix B for state-by-state rankings and the methodology section for additional detail on the index.)

Note: Figures show permanent law in Illinois enacted through September 10, 2018, at 2015 income levels. Top figure represents total state and local taxes as a share of non-elderly income. The sixth edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.