CHICAGO – How should Illinois' financial woes be met? "Tax the rich!" angry protesters shout. Sounds fair to those who live in poverty and those that struggle to maintain even a middle class status.
But there's a problem stopping that particular funding cure-all. Chicago is losing more and more of those deep-pocketed taxable rich each year. Last year alone, Illinois' wealthiest city lost more than any other American city – an estimated 3000 millionaires, the New World Wealth 2015 Migration report says:
…Chicago lost an estimated 3,000 millionaires last year, actually a larger flat number than Athens, which lost about 2,000 (though given Greece's overall situation, they've probably been bleeding millionaires for several years now). Chicago is the only American city the study identifies as losing millionaires. America as a whole gained 7,000 new millionaires last year through migration, second only to Australia in the study.
In fact, according to this study, Chicago lost more millionaires than entire countries like Russia, Spain, and Brazil last year, but then again, just as with Athens, these countries have likely been seeing millionaires migrating out for some time.
And why did they leave? The answers may surprise you …
As for the reasons why the flight from Chicago, the study gets a little vague. They interview wealthy people to put this report together, and they were told "rising racial tensions, rising crime levels" as major considerations. I would have loved to have seen a poll that had these millionaires rank their concerns so we could get a much fuller sense of what is happening. While it's true Chicago is seeing racial tensions and a jump in crime, the city and the state of Illinois are also seeing significant economic problems, massive debts, and tax issues, and it would have been helpful to see where that all fit into considerations. San Francisco and Seattle are not exactly metropolises with low tax rates, but clearly what they do offer the wealthy offsets the costs.
And that isn't all …
Chicago and Illinois aren't just bleeding its wealthiest citizens. As we recently noted, Illinois is one of the few states losing population as America grows. Note the Chicago emigration numbers from the census report: Chicago saw a net loss of 6,263 residents for the 12 months measured (encompassing parts of 2015 and 2016). If New World Wealth's report is accurate, that means about half of the people Chicago lost were millionaires. If New World Wealth is going by the region and not just the city, then we see a quarter of the people leaving as millionaires.
As the report notes, when a city or country is bleeding millionaires like this it should be taken as a major warning sign: "Millionaires are often the first people to leave. They have the means to leave, unlike middle class citizens." And those millionaires are the ones that public employees want to turn to fix their pension crisis and the state's massive economic problems. Thousands of them just said "no thanks."
