From Wirepoints:
Chicago’s Mayor Johnson wants the ultra rich to ‘step up.’ They’re more likely to step out.
By: Ted Dabrowski and John Klingner
If Illinois’ out-migration data tells us anything, Mayor Brandon Johnson’s targeting of the rich to fund his city’s big deficits will be counterproductive.
Going after them will only force more to leave.
Johnson’s got big budget deficits at the city level, at the Chicago Public Schools and at the Chicago Transit Authority, but since we won’t pursue any spending reforms, he’s looking for billions in fresh income.
“The ultra rich continue to get away with not having to put more skin in the game,” was Johnson’s response to a reporter’s question on how he wants to handle CTA’s cash flow problems.
“So we do have to have substantive conversations around revenue streams that challenges the rich in this state to step up in a way that does not continue to place the burden on working people.”
Either Johnson doesn’t understand or he simply doesn’t care.
Illinois’ rich have been fleeing the state for years and yet he still wants to target those that remain.
In the highest income bracket that IRS state-to-state migration data tracks – those making more than $200,000 a year – Illinois has netted a loss of people every single year since 2012 (the first year the IRS began reporting state-to-state migration by age and income).
In 2022 alone, Illinois lost 16,363 taxpayers making more than $200,000 to out-migration, but gained only 7,071 from other states. It was one of the biggest losses of the wealthy in the country.
What’s worse, the gap between the number of wealthy taxpayers moving into Illinois and those moving out continues to widen.
In all since 2012, Illinois has netted a loss of nearly 60,000 taxpayers making more than $200,000.
The big losses of wealthy Illinoisans also means an ever-growing hit to the state’s tax base.
In 2022 alone, the net out-migration of those making more than $200,000 resulted in a net loss of $7 billion in income that could have been taxed (AGI) in Illinois.
In total, a net of over $40 billion in taxable income has been taken from Illinois over the last decade – a significant loss.
The impact of those cumulative losses on the state’s budget in 2022 alone?
More than $1.5 billion in foregone income tax revenues.
We can also use the IRS data to compare Illinois’ wealth exodus to the rest of the country.
We look below at the ratio of how many taxpayers making more than $200,000 move into a state vs. how many it loses.
Take the biggest winner, Florida, with a ratio of 2.74.
That means it gained 2.74 taxpayers for every one it lost.
For several years now, the Sunshine state has been a massive winner of people and their wealth.
At the far other extreme is Illinois, with a ratio of just 0.43 – the nation’s worst. [Emphasis added.]
As mentioned above, in 2022 Illinois’ gained 7,071 taxpayers making more than $200,000, but it lost 16,363 such taxpayers, resulting in that 0.43 ratio.
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Illinois has already lost a net 1.6 million people to other states since 2000. That’s the nation’s third-biggest net loss of residents after only New York and California. And as we’ve written in the past, those net losses have come in every age and income group that the IRS tracks.
The quickest way to speed those losses up?
Go after the rich.
