More people left Illinois last year than did residents of any other state. And most of them landed in Tennessee.
Why are they leaving and why do they choose Tennessee?
While the violence in Chicago has received much publicity, most of those fleeing Illinois are not the ones who live in the hellish inner-city neighborhoods. No, what’s driving Illinoisans away is not bullets but tax burdens.
In a Sept. 4 editorial for the Chicago Tribune, Kristen McQueary lays out, with sardonic wit, the reasons why Illinois is losing population while Tennessee is gaining.
By McQueary’s estimation, the steady outward migration, which has been going on for several years, is about to get a lot worse if the political winds in the state’s Nov. 6 gubernatorial election blow more Democrat lawmakers into the Capitol and Democrat J.B. Pritzker into the governor’s mansion.
Pritzker and company have let it be known they intend to overhaul the state’s tax structure – again – with a sweeping constitutional amendment. The change would replace Illinois’ flat tax and give politicians the flexibility to institute a graduated income tax — “and then adjust the tax rates in perpetuity,” McQueary writes.
Those “adjustments” will occur in one direction – upward.
“They want us to write another check and shut up,” she writes. “Or move.”
Illinois’ credit rating has reached junk-bond status. Its debts and pension liabilities are above $200 billion and taxpayers are paying more than $1 billion annually in interest for late payments to state vendors. Property taxes are the second-highest in the nation and the state has to borrow money to balance its budgets.
As the old saying goes, the problem with socialism is that you eventually run out of other people’s money. Illinois residents are finding that out the hard way, after years of electing socialist politicians promising ever more attractive government-funded “free” programs.
According to McQueary’s editorial, Illinois already has a tax structure that mercilessly rakes residents over the coals.
Lawmakers slammed a 67 percent personal income tax hike through the General Assembly in 2011 under the condition that it would be temporary, only to waffle on their promise and try to make it permanent.
“Under pressure, they did allow a portion of the tax to sunset. For a moment. Then they passed a new 32 percent income tax hike. And now they’re vowing to rewrite the state constitution to permit a graduated income tax without revealing how much it would cost,” McQueary writes.
Forbes sent up warning flares back in May 2016 with an article by Travis Brown comparing high-growth, low-tax states like Tennessee to tax-and-spend states like Illinois.
Illinois, Brown wrote, was “attempting the impossible task of taxing its way into prosperity.”
“So while the Democrat legislature talks up a higher tax on ‘the rich,’ in reality they are punishing the small businesses that are the economic drivers of the state and the nation. It’s little wonder, then, that between 1992 and 2014 Illinois lost nearly $42 billion in net adjusted gross income, with nearly a quarter of that staggering total going to income-tax-free Florida. With the odds stacked against Illinois, the state should probably not embrace a tax hike that will drive it even further into the red.”
These tax hikes are especially hard on lower middle-class working families, those with household incomes roughly between $50,000 and $75,000 a year.
Robert Perunko and his wife, of Gurnee, Illinois, are feeling the pain.
Perunko drives a 2007 Toyota Corolla with more than 200,000 miles.
Here’s what McQueary had to say about the Perunko family’s plight trying to survive in Illinois:
He sold his motorcycle to manage mortgage payments, put off new windows on the family’s Cape Code-style house and started changing the oil on the car himself to save money. Family members eat meals at home. They bring their lunches to work. A recent splurge? Taking their young son to see the movie ‘Coco.’ That’s it.”
The property-tax bill on the Perunkos’ modest home, valued at $210,000, is $6,000 a year, or $500 a month. In Tennessee, homeowners pay property taxes of $500 a year for a nicer home with a swimming pool.
The Perunkos also pay more than $4,000 in state income taxes, and would have at least another $900 tacked onto that bill under the graduated income tax being proposed by the Democrats. In Tennessee, residents have no state income tax deducted from their payroll checks.
So it’s no surprise that the Perunkos are looking to escape Illinois. They have been house shopping south of Nashville, where new subdivisions are sprouting like mushrooms in once-empty fields.
“I am old and wise enough to know the difference between being male and being a man,” Perunko says. “As such, having Democrats and (House Speaker Michael Madigan) stealing the very quality of life and ability for me to raise a family, our child … as a man I can’t tolerate that.”
Yet, as McQueary aptly notes, so many others will tolerate it. “So many Illinois voters will buy into the rhetoric that more money through a graduated income tax will solve Illinois’ problems. It won’t. It will drive taxpayers away, many of them south.”
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Anthony Accardi is a reporter for The Tennessee Star.