When Property Values Go Down Chicago Just Bumps Up Transfer Taxes
Why is it when we have revenue issues in our household we just work on cutting back spending, yet when government has revenue issues they just find new ways to raise our taxes? That is all I can think of after reading an article in the Chicago Tribune how the Chicagoland governments are all pleased with themselves for raising the transfer taxes and sales taxes with unanimous consent.
It is no surprise that when property values were rising few governments lowered their tax rates to counteract the surpluses coming in. Instead they just added more vote buying, and nephew employing, services for the sake of the children (or elderly). Now that the natural cycle is fulfilling it’s role and property values are stable or declining are the governmental agencies cutting back?
Hell no.
They just are finding ways to raise more taxes on the poor suckers taxpayers by unanimous consent. And since this is a real estate blog I will not even go into the abomination of red light cameras they are installing in Chicago at a rapid pace. Touted as a safety feature they also just happen to bring in an additional 50 million to the city coffers.
All I can say is beware of the politicians. They are only concerned with your needs when they need your vote.
Sellers, who now pay combined real estate transfer taxes of $1.50 per $1,000 of sales price to Cook County and the state, will be required to pay an additional $3 per $1,000 to the city beginning April 1 under the action.
The $3 charge was to have been imposed on property buyers. But because they already ante $7.50 per $1,000 to the city, Ald. Patrick O’Connor (40th) proposed that the pain be shared. His measure, endorsed by Mayor Richard Daley, won council approval by a 49-0 vote without debate. via chicagotribune.com.
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Comment by Mark A. on 13 March 2008:
My sentiments exactly. Here’s how they probably schemed it in City Hall. They figured ok, at $10.50 per $1,000 a sizeable number of home buyers may get cold feet and change their minds about buying a place in Chicago. That would be counterproductive to our plans of raising money for the CTA pension plan. Sellers otoh, have no choice but to pony up when they sell. Besides, they’re only paying $1.50 per $1,000 now and if they want to buy again in Chicago, they won’t be faced with sticker shock. What they conveniently forget, is: Those sellers paid $7.50 per $1,000 too when they bought their homes in Chicago, so in essence, they are paying $10.50 per $1,000. But, this is an elegant way to sugarcoat this tax increase and sweep it under the rug. It’s the Chicago City Hall way.
Comment by Vance Shutes on 13 March 2008:
Tom – You are SO right about this one! The economic rules which apply to our families and households seemingly don’t apply to our bureaucrats. These are the same bureaucrats who held themselves out as so brilliant upon their election. Maybe they were brilliant, as they have played the rest of us for fools. A unanimous consent only of the elected! They seem to forget that in America (uh, Chicago still is part of America, isn’t it?), government exists at the consent of the governed – meaning, US! When enough of US get fed up enough with this callous treatment, we can organize recall elections – or at worst, vote them out of office during the next regular election cycle.
Comment by Joe P on 13 March 2008:
Vance, don’t worry by the time elections come up again the government officials will use our tax money to buy the votes we need…hows that. lol.
But kudos to Tom and the other comments here, if I am cutting back on my spending why isn’t the government? Cut jobs, I am not talking about Police and Fire dept, nor Teachers I am talking about the administration departments, the paper pushers, the assistant to the assistant. Why do I need a school principals who make 200K a year in Palm Springs? CUT BACK!
When I worked in the software industry I was completely shocked that the a very large California School district had a very very large number of Windows 95 based computers (about a thousand) still being maintain by tax dollars, and this was in 2003! I bet they are still there.
Comment by Mark A. on 13 March 2008:
Be careful what you wish for, Joe. Fresh off the feed reader:
Daley announces $20 million in city budget cuts
Here’s the thing about Chicago, though. We’re not in a mayoral election year, and the thinking is that by the time mayoral elections roll around in the Windy City, voters will have forgotten all about this. This strategy has worked for the past, I don’t know, almost 20 years. Mayor Daley: The King of Chicago.
Comment by Draven on 14 March 2008:
Hi Mark,
very nice story wht u think ?
(http://www.chicagotribune.com/news/local/chi-council-transfer-tax-13mar13,1,1473088.story))
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