Since 2010, people have left Illinois at a much higher rate than any other Midwestern or neighboring state.
The Internal Revenue Service collects migration information on taxpayers and their dependents; these migration rates reflect the percentage of a state’s population of taxpayers and dependents who move into or out of the state. According to IRS data, between 2010 and 2014, 1,144,000 of Illinois’ almost 11 million taxpayers and dependents left the state, while only 855,000 people moved in. This equals a net loss of almost 289,000 people, or 2.6 percent of Illinois’ taxpayers and dependents.
When people leave a state, they take their taxable income and wealth with them. Since the state income-tax hike in 2011, Illinois has lost $10.4 billion of taxable annual income that could have been spent and invested in the Illinois economy.
Comparison to other states
Illinois had the largest net loss of taxpayers and dependents among all the Midwestern states, plus neighboring Kentucky.
While Michigan had the second-highest loss rate at 1.65 percent, and seven states had loss rates of less than 1 percent, North Dakota and South Dakota both gained people. South Dakota gained people at a rate of 0.14 percent, while, due to its increase in jobs, North Dakota gained residents at a rate of 5.1 percent – double the rate of loss for Illinois. This is no surprise considering Illinois’ lack of good blue-collar jobs.
In 2013, the state’s worst year for out-migration, Illinois had a net loss of almost 82,000 people. By comparison, in 2013, Michigan, with its second-highest out-migration rate, lost on net 24,000 people. Thus, three times as many Illinoisans as Michiganders left their home state that year.
Since 2010, Illinois has lost 289,000 people. If Illinois had simply lost people at the same rate as neighboring Indiana, Illinois would still have 224,000 more people. Had Illinois lost people at the same rate as Iowa, its losses would total only 10,000 people – and 278,000 more people would still call Illinois home. Even if Illinois lost people at the same rate as Michigan with its second-highest net loss rate, nearly 109,000 more people would still be living in Illinois.
Although most Midwestern and neighboring states have experienced some out-migration of residents, Illinois’ losses dwarf those of the other states. Many people have decided they want to stay in the Midwest – just not in Illinois.
It is clear that Illinois’ high taxes are driving away taxpayers. Many wealthier Illinoisans with the means to do so chose to leave their high-tax home state, while those who could not move continued carrying the burden of a 67 percent tax hike on their income. Reducing Illinois’ heavy income taxes is imperative to stop the flood of out-migration.