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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Illinois VS COUNTRY B Oregon

Side-by-side analysis of income tax, effective rates, and take-home pay for Illinois and Oregon in 2026.

Daniel · CountryTaxCalc Updated August 2026 Tax Comparison 2026
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OVERVIEW
Illinois's flat 4.95% income tax beats Oregon's progressive 4.75%-9.9% rate at every income level compared — at $100,000, Illinois's state tax bill ($4,805) is $3,202/year lower than Oregon's ($8,007), and the gap widens to $10,284/year at $250,000 as more of an Oregon earner's income hits the 8.75% and 9.9% brackets. Oregon has no general sales tax at all — one of only five states with that feature — while Illinois's combined state-and-local sales tax averages roughly 8.77%. Property taxes flip the script for homeowners: Illinois's ~1.88% average effective rate is tied with New Jersey for the highest in the nation, more than double Oregon's ~0.81%, so on a $400,000 home Illinois costs about $4,280/year more in property tax alone — enough to outweigh the income-tax savings for many homeowners. Retirees see the starkest divide: Illinois fully exempts all retirement income (Social Security, pensions, 401(k), and IRA withdrawals) from state tax with no age requirement or dollar cap, while Oregon does not tax Social Security but taxes pension and retirement-account withdrawals at its full 4.75%-9.9% rates.
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.

🏙️
COUNTRY A
Illinois
TAX RATE
4.95%
Flat Tax

No local income tax

🌲
COUNTRY B
Oregon
TAX RATE
4.75-9.9%
4-Bracket Progressive

Second-highest top marginal state rate in the US

TYPICAL ANNUAL DIFFERENCE
Moving from Oregon → Illinois at $100,000
$3,202

That's $267/month back in your pocket

Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.

GROSS INCOME
🏙️ IL TAX
🌲 OR TAX
SAVINGS
10-YEAR
$50,000
$2,330
$3,633
$1,303
$13,030
$75,000
$3,568
$5,820
$2,252
$22,520
$100,000
$4,805
$8,007
$3,202
$32,020
$150,000
$7,280
$12,614
$5,334
$53,340
$250,000
$12,230
$22,514
$10,284
$102,840
💡

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🏙️

Illinois Pros & Cons

+ PROS
  • Flat 4.95% beats Oregon's progressive rate at every income level shown, saving $1,303 to $10,284/year
  • Fully exempts ALL retirement income — Social Security, pensions, 401(k), and IRA withdrawals — with no age requirement or dollar cap
  • Chicago metro offers a much larger job market in finance, technology, and logistics than Portland's
  • O'Hare hub gives strong domestic and international flight connectivity for business travel
− CONS
  • Property tax among the highest in the nation (~1.88% average, tied with New Jersey) — more than double Oregon's ~0.81%, costing about $4,280/year more on a $400,000 home
  • Combined sales tax averages ~8.77% versus Oregon's 0% — a real cost on everyday spending
  • Flat tax offers no low-income relief — the 4.95% rate applies from the first dollar earned
  • Illinois's $140B+ unfunded pension liability raises the risk of future state tax increases
🌲

Oregon Pros & Cons

+ PROS
  • Zero sales tax on any purchase — one of only five states (with Montana, New Hampshire, Delaware, and Alaska) with no general sales tax
  • Social Security benefits are not taxed by Oregon at all
  • Lower property tax (~0.81% average) than Illinois's ~1.88% — meaningful savings for homeowners
  • Portland and the Willamette Valley offer strong outdoor-lifestyle appeal and a growing tech sector
− CONS
  • Progressive rate climbs to 9.9% — the second-highest top marginal state income tax rate in the country, costing $1,303 to $10,284/year more than Illinois at the levels shown
  • Pension, 401(k), and IRA withdrawals are taxed at Oregon's full rates (up to 9.9%), unlike Illinois's complete exemption
  • No general sales tax means Oregon relies more heavily on income tax revenue, which helps explain the steep top bracket
  • Portland metro cost of living runs higher than most of Illinois outside the Chicago area
FAQ

Frequently Asked Questions

Is Illinois or Oregon cheaper for state income tax?

Illinois is cheaper at every income level compared. At $100,000, Illinois's flat 4.95% ($4,805) beats Oregon's progressive 4.75-9.9% ($8,007) by $3,202/year. The gap grows to $10,284/year at $250,000 as more income hits Oregon's 8.75% and 9.9% brackets.

Does Oregon really have no sales tax?

Yes. Oregon is one of five states (with Montana, New Hampshire, Delaware, and Alaska) with no state or local general sales tax. Illinois's combined average is about 8.77%, so Oregon shoppers save on every purchase — though this doesn't offset Oregon's higher income tax for most earners.

Which state has lower property taxes?

Oregon, clearly. Its ~0.81% average effective rate is less than half Illinois's ~1.88% (tied for the highest in the nation). On a $400,000 home, that's about $3,240/year in Oregon versus $7,520/year in Illinois — a $4,280/year difference that can offset much of Illinois's income-tax advantage for homeowners.

How does each state tax retirement income?

Illinois is dramatically more retiree-friendly: it fully exempts Social Security, pensions, 401(k), and IRA withdrawals from state tax, with no age requirement or dollar cap. Oregon does not tax Social Security, but pensions, 401(k), and IRA withdrawals are taxed at Oregon's full income tax rates (4.75%-9.9%).

At $100,000 income with a $400,000 home, which state costs less overall?

Combining income and property tax: Illinois totals about $12,325 ($4,805 income + $7,520 property) versus Oregon's about $11,247 ($8,007 income + $3,240 property) — Oregon is actually about $1,078/year cheaper once property tax on a typical home is included, reversing the income-tax-only comparison.

Does Illinois tax capital gains differently than Oregon?

No. Neither state offers a preferential capital gains rate. Illinois taxes capital gains at its flat 4.95% rate; Oregon taxes them as ordinary income at its progressive 4.75%-9.9% rates, the same as wages.

Which state is better for high earners?

Illinois, by a wide margin, because of its flat rate. A $250,000 earner pays $12,230 in Illinois versus $22,514 in Oregon — a $10,284/year difference. Oregon's steep top brackets (8.75% above $10,200 and 9.9% above $125,000) hit high earners especially hard.

Is Chicago or Portland better for retirees on taxes?

Illinois wins decisively for retirees with Social Security, pensions, or retirement-account income, since none of it is taxed. Oregon only exempts Social Security — retirees drawing heavily from 401(k)s or IRAs would still pay Oregon's full income tax rates on those withdrawals.
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