Report Shows Illinois Ranked High in Most Complicated and Expensive Estate Taxes in the US
Why Are Illinois’ Real Estate Taxes Near Highest in the Nation?
Filling out tax forms is never fun, especially when you know a big price tag is going to come at the end of it. Unfortunately, the news in Illinois is not encouraging. According to a new report by WalletHub, Illinois is one of the worst states for real estate taxes in the United States. The state is outranked only by New Jersey.
WalletHub reports that the average yearly cost of estate taxes in Illinois is $3,971, while the nationwide average is $2,089. The state with the lowest property tax is Hawaii, with an average yearly rate of just $482. Even if you’re a renter, don’t celebrate too soon. As it turns out, this problem is not just for homeowners. According to census figures, 36 percent of people in Illinois rent homes and apartments, and their rent prices are directly impacted by property taxes. When the tax rate goes up, rent usually goes up as well.
The Flat Rate Income Tax in Illinois
In addition to the high real estate taxes in The Prairie State, Illinois also has one of the more regressive income tax structures in the United States, according to a nonpartisan group called the Institute on Taxation & Economic Policy. The tax structure of a state is regressive if the lowest income earners pay a higher percentage of their earnings to the state than the highest income earners. The highest tax rates in Illinois are paid by the middle class, earning it a spot as the state with the 47th most regressive income tax rate in the country. The only states with more unbalanced tax policies are Washington, Arkansas and Hawaii.
The U.S. Census Bureau reports that Illinois relies on income taxes for almost 42 percent of its total revenue. This has changed since 2009, when the tax revenue in the state relied heavily on sales taxes. However, with the decline in the economy, income taxes have become the largest source of revenue.
Should I Talk to an Illinois Estate Planning Attorney About Estate Tax Law?
Before you think about making a business deal or consider purchasing some real estate, it would be a good idea to consult someone with knowledge of property taxes and estate tax law in the state of Illinois. The real estate lawyers of Pluymert, MacDonald, Hargrove & Lee, Ltd. understand the complex tax structure in Illinois and can help you make informed decisions about your investments. If you’d like to know more, contact an Illinois estate planning attorney in Hoffman Estates and Des Plaines today.