The Illinois tax system is unfair, according to an interest group that studies these things. The Illinois system is the fifth most unfair in the nation, in terms of low-income people paying the highest proportion of their income in taxes vs. the wealthy paying the lowest, according to the Institute on Taxation and Economic Policy. Executive director Matt Gardner explains the consequences:
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“When you have a tax system that decides, as Illinois has, it’s going to get its revenue from taxing low- and middle-income families, and it’s not gonna get it from taxing upper-income families, you’re not taxing where the income growth is, and that is a recipe for a revenue system that won’t be able to pay for needed services in the long run,” he said.
The study figures in state and local sales, excise, property and income taxes. The first three, Gardner says, are naturally regressive, but income tax can make up for that, except in Illinois it does not, because of the flat rate and the low personal exemption.
As a result, the tax burden feels heavy to many people, but the state never has enough money.
According to the study, the No. 1 unfair tax state is Washington, which has no income tax. The fairest state is Delaware, which has no sales tax.