Chicago Mayor Brandon Johnson has been vocal about his belief that taxing the wealthy could solve the city’s financial issues, which include critical challenges within the Chicago Transit Authority (CTA) and the Chicago Public Schools (CPS).
Johnson’s demands for increased taxes on the ultra-wealthy follow the failure of a transit funding bill aimed at preventing a fiscal collapse within the city’s transit system. The mayor’s consistent approach pins the blame for financial woes on high earners, asserting that they must pay their fair share for a world-class public transit system.
This reflexive response, however, appears to rely more on ideological comfort than on an understanding of the city’s complex financial circumstances.
The reality in Chicago is more complicated than simply raising taxes on the wealthy. The city faces simultaneous fiscal emergencies across its budget, schools, and transit systems, a situation worsened by Johnson’s reluctance to confront unsustainable spending practices and an agenda shaped by the Chicago Teachers Union.
Since 2019, spending by city government has escalated dramatically by $6.6 billion, representing a staggering 62% increase. Chicago Public Schools have seen their spending per student rise nearly 40%, despite a 9% drop in enrollment. Meanwhile, the CTA’s budget has increased by 40% since 2019, even when ridership has only recovered to 68% of its pre-pandemic levels.
Despite receiving nearly $6 billion in federal assistance related to COVID-19, Chicago’s government, CPS, and CTA opted to raise taxes and fees instead of aligning their budgets with post-pandemic realities.
When Johnson points to wealthy individuals as the reason for the CTA’s troubles, he overlooks the substantial $2.2 billion in one-time COVID aid that the agency received and mismanaged, all while increasing its budget by 40%. This raises the question: how can high taxes be deemed the culprit for these fiscal problems?
In fact, high taxation is the driving force behind the outflow of residents and investment from both Chicago and Illinois as a whole. Surveys consistently reveal that the primary reason former Illinois residents chose to leave was due to taxes, with crime and the pursuit of better economic opportunities following closely behind.
Currently, half of the state’s residents have indicated they would leave if they had the financial means to do so. Illinois’ tax environment punishes all income levels, with the Chicago sales tax ranking second only to Seattle, and commercial property taxes being second only to Detroit.
Looking ahead, Illinois is projected to impose the highest state and local tax burden in the nation come 2025, costing the average household a staggering $13,099—52% more than the national average. Property taxes are set to increase annually, with CPS’s levy rising by over $500 million alone since 2019.
What has resulted from this increasingly hostile tax environment? Since 2012, Illinois has seen a net loss of nearly 60,000 residents earning more than $200,000. For high earners, relocating is a viable option, making them more likely to leave the state.
Data from 2022 reveals Illinois ranked as the second-highest state nationally for the loss of households aged 26 to 35 with incomes above $200,000. Not only does this mean an immediate decrease in taxable income, but it also suggests long-term repercussions, as this group represents young taxpayers poised for future growth.
At the same time that Illinois legislators have managed to pass a record-high budget filled with tax hikes and creative financial maneuvers, neighboring states have started slashing income taxes, creating a stark contrast in tax savings for those who might consider relocating.
Indiana and Wisconsin have emerged as top alternatives for Illinois residents seeking lower tax bills, offering potential savings of up to $5,315.
Johnson’s unwavering focus on the wealthy as the root of the problem fails to acknowledge the lasting harm such a stance inflicts on the state. Illinois ranks last among states in equity when evaluating factors such as poverty, homelessness, labor participation, homeownership, median household income, and unemployment—a troubling reflection of its progressive agenda.
The strategy of forcing high earners out of the state ultimately leads to a decline in job opportunities, investments, and tax revenues. The affluent demographic is the most mobile, and their mass exodus from Illinois is increasing at an alarming rate.
A striking example of this is Ken Griffin, Illinois’ former wealthiest resident, who reportedly contributed over $1 billion in state income taxes over the last decade. His move to Florida has led not only to his business relocating but also to a significant shift in philanthropic efforts that once supported numerous Chicago organizations. Since his departure, Illinois has lost out on over $650 million in charitable donations.
Griffin’s relocation also means that 10,000 employees, along with their salaries and purchasing power, have left Illinois, exemplifying how the exit of just one individual can result in significant losses in tax revenue and economic activity.
While calling for increased tax burdens on high earners may resonate with some, the resulting economic consequences can lead to broader social disintegration. Absent a fundamental shift in both political and fiscal strategies, Illinois is likely to face continued losses of people, income, and opportunity, underscoring the reality that taxing the rich is far more complex than it appears.
image source from：https://www.illinoispolicy.org/vallas-tax-illinois-rich-dogma-is-a-dangerous-delusion/
