IRS data show the average income of taxpayers leaving Illinois surpassed the average income of taxpayers entering the state by $20,000 in 2014, a record loss for Illinois in the wake of the 2011 income-tax hike.
Politicians enacted Illinois’ 2011 income-tax hike during a late-night legislative session in January 2011 and raised the state’s personal income-tax rate to 5 percent from 3 percent. This 67 percent income-tax hike lasted for four years, during which time Illinois experienced record wealth flight.
IRS data reveal what happens when politicians choose short-term tax revenue gains over long-term stability. The short-term increase in tax revenue gained from higher tax rates is offset by the long-term loss of substantial portions of Illinois’ tax base.
The average income of taxpayers leaving Illinois rose to $77,000 per year in 2014, according to new income migration data released by the IRS. Meanwhile, the average income of people entering Illinois was only $57,000. 2014’s $20,000 difference in average income between people who left Illinois and people who entered the state is the highest on record. And this divergence between out-migrating and in-migrating income began widening significantly in the wake of the 2011 tax hikes.
This post was published at Zero Hedge on Nov 16, 2016.
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