The Great Business Exodus: Why Companies Are Fleeing IL for TX
Flat Tax
+ High property taxes (2nd highest)
+ Pension crisis
+ Population declining
No State Income Tax
+ Business-friendly
+ Growing economy
+ Population booming
At $100,000 income:
That's $412/month back in your pocket!
Income: $0
State Tax: $0
Take Home: $0
Income: $0
State Tax: $0
Take Home: $0
| Income | IL State Tax | TX State Tax | Annual Savings | 10-Year Savings |
|---|---|---|---|---|
| $50,000 | $2,475 | $0 | $2,475 | $24,750 |
| $75,000 | $3,713 | $0 | $3,713 | $37,130 |
| $100,000 | $4,950 | $0 | $4,950 | $49,500 |
| $150,000 | $7,425 | $0 | $7,425 | $74,250 |
| $250,000 | $12,375 | $0 | $12,375 | $123,750 |
Illinois: 2.3% average (2nd-highest in US after NJ)
Texas: 1.6% average (higher than most, but lower than IL)
On a $300,000 home:
Plus housing in TX metro areas is often 20-30% cheaper than Chicago suburbs!
Best for: Corporate jobs, families
Vibe: Most Chicago-like (big city, corporate HQs)
Why IL residents love it: Similar feel to Chicago but warmer & cheaper
Best for: Tech workers, young professionals
Vibe: Liberal enclave in conservative state
Why IL residents love it: Progressive politics, music scene, startup culture
Best for: Energy, healthcare, diverse community
Vibe: Big city energy, international
Why IL residents love it: Similar diversity to Chicago, great food scene
Best for: Affordability, slower pace
Vibe: Relaxed, affordable, family-friendly
Why IL residents love it: Lowest cost of living, still has big city amenities
The Problem: Illinois has $140+ billion in unfunded pension liabilities - the worst pension crisis in America.
What this means:
Result: Residents and businesses are fleeing before the inevitable tax tsunami hits.
Texas public pensions are ~75-80% funded (healthy). No looming catastrophe. Constitutional prohibition on income tax means they CAN'T just raise taxes to fix problems.
A: Yes! Many companies now allow this. You'll pay $0 TX state tax. Make sure to establish TX residency properly.
A: Federal taxes are the same regardless of state. This comparison is state income tax only.
A: Very likely. The pension crisis is unsolved and getting worse. Many expect the income tax to rise from 4.95% to 6-7% within 5-10 years.
A: Yes. Housing in Dallas/Houston is 20-30% cheaper than Chicago suburbs. Property taxes are lower. Income tax is zero. Total cost of living is significantly less.
A: Probably. Chicago has world-class food, architecture, culture. Dallas/Houston have good food scenes but different vibe. Austin is most "cultural." It's a trade-off.
A: TX summers are brutal (95-105°F with humidity). But you'll never shovel snow again. Most IL transplants prefer the trade-off after 1-2 years.
If you're an American living abroad and considering a move back to the US, you may have complex tax filing requirements. Even after returning, you may need to catch up on past US tax filings.
Taxes for Expats (TFX) helps Americans abroad and those returning home with:
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