Illinois Remains the Least Tax-Friendly State: How Does It Affect Your Personal Finances?

Illinois has consistently ranked the least tax-friendly for middle-class American families following New Jersey and New York. According to a common belief, the high property costs, state income, and sales taxes are the driving forces behind the current situation in the land of Lincoln. Kiplinger, a D.C-based online publisher focusing on business forecasts and advice concerning personal finance, shared the fact in its story where Illinois average combined local and the state tax rate was approximately 8.83%.

The state of Illinois is known to have a flat state income tax rate of 4.95%, including a 6.25% state sales tax with 4.75% in local taxes depending on the area. For many experts, the rankings come as no surprise as Illinois has been at the bottom for several years in a row making it almost a challenge for middle-class families to lead a comfortable yet modest life in the state. 

Identifying Political and Publicly-Known Explanations

According to the founder and executive editor of Wirepoints, Mark Glennon says the sole reason behind the current state of affairs is property taxes. The unreasonably high tax rate also implies some serious mishandling of money by politicians in power but experts like Glennon emphasize that policymakers in Illinois have a serious spending problem. Unlike other states in the US, they have failed to make the most out of the recent federal provisions to improve their unemployment trust fund.

Despite introducing programs after programs, the state of Illinois has failed to improve the situation and the municipal government rules that could ultimately save a huge chunk of the taxpayer’s money. As of now, the municipal government does not allow negotiating labour contracts and forces everything into collective bargaining during difficult phases.

Consequences and the Recognisable Solutions at Hand

As a result of the exorbitantly high tax rates, it is evident that people from different income groups are leaving Illinois for good and that much is reflected from the IRS migration data released not too long ago. The only ones stuck in the state are those who cannot afford to move with their families to a greener state with tax benefits like Florida and Tennessee. People demand better-paying jobs and lower taxes but unfortunately, the state of Illinois has no immediate solution to give them at its disposal.

The only solution as far as one could see to the high tax rates is to focus on smart personal finance plans by taking advantage of payday loans in Illinois to help you pay any immediate bills like rent, college tuition, automobile repairs, hospital bills etc. if you are a homeowner living in Illinois then make sure to explore personal loan and installment loan options.