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ILEPI rebuts IPI critique

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* After I posted an Illinois Economic Policy Institute analysis last month, the Illinois Policy Institute published a critique, including this

Data from state income tax returns shows Illinois’ population is declining – and the ILEPI study excluded it

An entire section of the new report is dedicated to comparing differences between annual Census estimates and Illinois Department of Revenue data on state tax returns. They use the tally of the number of tax returns filed (which is not the same as total population) from 2010-2020 as evidence of Illinois’ population growth during the decade. The authors have problematically excluded the parts of that same dataset showing the number of individuals represented in the tax returns has declined substantially from 2010-2020.

ILEPI’s report contains a table showing growth of 200,143 Illinois tax returns from 2010-2020. But the number of tax returns filed is not representative of the number or individuals in the state. Many couples file jointly or have dependents who do not file their own tax return. The state tax data also includes the number of basic exemptions – a count of the number of individuals (filers and their dependents) – represented in the data, which shows Illinois’ total population declined by 354,759 people between 2010 and 2020. (Illinois eliminated basic exemptions for joint filers earning more than $500,000 and all other filers earning more than $250,000 in 2017, so we’ve re-added those figures to the data based on previous Illinois income tax returns).

While every Illinoisan is not required to file a state income tax return, these figures are similar to the Census Bureau’s original estimate of Illinois’ population decline of approximately 253,000 during the decade. The fact that not all Illinoisans file state income tax returns likely explains the bulk of the difference between the Census Bureau’s estimates of population decline and changes in state tax return data.

* I asked ILEPI’s Frank Manzo for a response to this. Here’s an excerpt

Critiques that the ILEPI-PMCR study did not include basic exemptions in analyzing Illinois Department of Revenue (IDOR) tax statistics misunderstands the key takeaway that Illinois’ tax base has expanded.

Tax return data is useful to include because it can provide additional information on changes that are occurring within a state, but it is only partially complete because it does not include people who do not file taxes. People who do not earn incomes are not included in tax statistics, but are included in Census counts and in household surveys.

With that said, Illinois Department of Revenue tax returns between 2010 and 2020 generally corroborate a finding in the official Census count that the Chicago area added population and Downstate lost population. The tax return data show that the Chicago area added 203,000 taxpayers (a gain of 6%) while Downstate lost 3,000 taxpayers (a loss of 0.2%).

Overall, the data show that Illinois added more than 200,000 taxpayers between 2010 and 2020, a 4% increase statewide. Additionally, there was an 80% growth in taxpayers earning over $500,000 per year and a 52% gain in those reporting between $100,001 and $500,000 while those claiming Earned Income Credit (EIC) government assistance fell by 11%.

While exemptions could potentially be useful to include, they would simply be estimates in Illinois, because the state eliminated exemption allowances for high-income taxpayers in 2017. However, this is the group of taxpayers that has grown the most over the decade. Assumptions would need to be made about how many exemptions these households would claim, and the resulting population estimate could swing wildly depending on the built-in assumptions.

The data that is objective and not based on any assumptions is the number of tax filers. That data shows that the tax base has grown and that Illinois has become higher-paid. It does not show a state in decline.

posted by Rich Miller
Wednesday, Nov 8, 23 @ 2:53 pm

Comments

  1. Exodus is a state of mind.

    Comment by Roadrager Wednesday, Nov 8, 23 @ 3:01 pm

  2. We can always pick two data points to show what we want to show. Fittingly, IPI presented their data with a picture of a U-Haul truck.

    If you look at long-term trends in population, say 1980 to the present, it is patently obvious that the population of Illinois is growing across generations. If you only compare 2010 to 2020, and only use adjusted federal data, you might conclude the sky is falling, and you need a U-Haul truck.

    Dear IPI. Illinois is not going anywhere. We will be here a long time. If you want to hinge your arguments on alarmist rhetoric regarding the falling sky, please use your U-Haul.

    Comment by H-W Wednesday, Nov 8, 23 @ 3:31 pm

  3. Has IPI EVER been right about anything?

    Comment by Morty Wednesday, Nov 8, 23 @ 3:36 pm

  4. I reviewed the links as much as possible - gotta make a living here in the heckhole of Illinois amirite?

    Besides the fact that there are myriad reasons that people move from state to state, what’s the point of this? IPI links to Center Square that links back to IPI, or IPI links to itself, etc. Net message? 0.9 percent outflow (maybe).

    So what?

    And an example of the myriad reasons for leaving - I remember some past coverage of the hollowing out of higher education in Illinois. This started under Blago and continued until the current governor was elected. Almost 20 years! Do parents want to spend $25K on in-state tuition, or less than $10K? Do they want their kids going to schools that were shrinking in attendance and having instructors under the gun to justify their programs’ existence?

    Comment by Lefty Lefty Wednesday, Nov 8, 23 @ 3:48 pm

  5. Illinois Prevaricator Institute.

    Comment by Big Dipper Wednesday, Nov 8, 23 @ 4:06 pm

  6. IPI has been right, as far as they’re concerned, with providing facts that only support their contentions, and, of course, lying through omission. Same biased grifter M.O. as usual.

    Comment by PublicServant Wednesday, Nov 8, 23 @ 4:58 pm

  7. The response was for a grift.

    The audience is the marks

    It’s not a serious piece.

    Frank Manzo knows the score.

    Comment by Oswego Willy Wednesday, Nov 8, 23 @ 5:02 pm

  8. Allied Van Lines (an IL company) had Illinois #1 as the top outbound state in 2022. California was second. Go to Allied Van Lines top outbound, and you can see the states that top states where folks relocated.

    Comment by Top of the State Wednesday, Nov 8, 23 @ 9:15 pm

  9. === Allied Van Lines (an IL company) had Illinois #1 as the top outbound state in 2022. ===

    And that makes sense, right? An Illinois moving company. Moves more Illinois people.

    Our population is fine. The sky is not falling. We have 12+ million residents. Add a few, subtract a few, we are okay.

    Comment by H-W Wednesday, Nov 8, 23 @ 9:27 pm

  10. === Allied Van Lines (an IL company) had Illinois #1 as the top outbound state in 2022. ===

    Is this supposed to be a serious analysis?

    Comment by Mark Thursday, Nov 9, 23 @ 2:17 pm

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