Survey: Illinoisans to pay over 10% of incomes to state, local taxes in 2025
Illinois will impose the nation’s seventh-highest state and local tax burden on residents in 2025. Taxpayers on average will pay over 10% of their annual income to support government, according to WalletHub.
Tax Day is coming, but the income tax represents just one of the many taxes Illinois will impose as part of the nation’s seventh-highest state and local tax burden in 2025.
Income, property, sales and excise taxes combined will cost each taxpayer 10.2% of their annual income, according to a new WalletHub report.
Of the three major tax categories tracked in the national analysis, WalletHub found property taxes consumed the largest portion of Illinoisans’ yearly earnings at 3.81%, followed closely by state excise and sales taxes at 3.78%.
Illinois’ flat income tax consumed the smallest portion of residents’ annual income. It saved the state from earning a higher overall spot on the list by landing Illinoisans almost exactly in the middle when only the state income tax was considered.
Illinois moved one spot higher for tax burden among U.S. states. It was No. 7 this year after ranking No. 8 in the 2024 survey.
Despite Illinoisans contributing a little over one-tenth of what they earn in a year to fund state and local governments, six states ranked ahead of Illinois when it came to tax burdens. Hawaiians will pay the most.
WalletHub found Hawaii residents paid nearly 14% of their annual earnings to fund government operations. Alaska had the nation’s lowest tax burden at 4.9%.
Illinois’ high taxes not only put strain on residents’ pocketbooks but often drive them out of state for lower-cost locales. Polling shows over 50% of Illinois voters asked said they would move out of state if given the chance, citing high taxes as the main reason.
As a result, Illinois lost population for nine consecutive years before revised Census Bureau estimates for 2023 showed the state population grew because of a massive spike in international migration that continued into 2024.
That bump was not all voluntary and might be temporary as international newcomers face the same tax and economic problems long-term residents have decided to face no longer. Illinois has lost 420,678 residents to domestic outmigration since 2020, according to Census estimates.
With nearly 3 in 5 Illinoisans believing the value of public services they receive are not worth the property taxes they pay – which are No. 2 in the nation and account for about one-third of their tax burden – lawmakers should be pursuing structural reforms that will keep families in Illinois.