Yes, The Rich Are Fleeing Illinois… And They’re Taking Billions With Them

Yes, The Rich Are Fleeing Illinois… And They’re Taking Billions With Them

Authored by Mark Glennon and John Klingner via,

We’re often told that Illinois is not losing its highly taxed residents. For example, a Chicago Magazine article last week had a headline saying exactly that. Don’t worry about lost income from the rich leaving, we’re supposed to believe. It’s just poorer folks fleeing.

It’s simply not true. There’s recent, hard data directly refuting that claim. If you want the best evidence, the Internal Revenue Service released its latest state-to-state migration numbers last month. Wirepoints analyzed the number of people moving into and out of Illinois and their net impact by income groups.

The data show that while lower income groups are fleeing Illinois in somewhat larger numbers, bigger earners are leaving, too. And they’re the ones that account for the overwhelming share of wealth lost by the state.

Specifically, tax filers with income over $200,000 made up 11% of all filers who fled, and they accounted for over half of the income that left Illinois.

Here are the details:

The IRS breaks down tax filers by Adjusted Gross Income (“AGI”) when it reports interstate migration data. Its new release covered the most recent year available, 2018.

First, let’s look at the net number of tax filers leaving Illinois in each income group. As you can see, the largest group is filers with under $25,000 in income. A net of over 9,900 filers were lost. But they were hardly alone. The wealthiest bracket of $200,000 and above, which is a vastly smaller portion of Illinois’ population, lost nearly half that, 4,800.

But look which group took most of the income with them. Below are the raw numbers on lost AGI from each category of earners. The bulk of lost income clearly came from the net loss of Illinois’ high earners. Those with incomes over $200,000 took $3.1 billion of income with them out of the net $5.6 billion total lost.

Now look at those numbers as percentages. Below is the number of people leaving and the AGI they took with them, by category, as a percentage of the total. The bigger earners were responsible for the lion’s share of lost income. Filers with incomes over $200,000 took with them 55 percent of the net income Illinois lost to other states.

This article focused on the most recent numbers, which are for the 2018 tax year. However, the story has been similar since at least 2012, as you can see from the chart below. For further information on the new IRS data including comparisons to other states, see our article from last month linked here.

The next time you read somebody claiming that wealthy Illinoisans aren’t fleeing, remember these facts.

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Read more about Illinois’s financial and out-migration crisis:

Tyler Durden

Fri, 02/07/2020 – 17:25

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