If it weren’t for Chicago politicians and "experts," Illinois would be a great place to live. I grew up just north of Chicago, and it’s a shame to see how much worse the “Land of Lincoln” has become since leaving. Many other Illinois residents have left the state in the last few years, more than any other state in the country.
With this latest report that three Chicago economists have proposed, the overtaxed populace of Illinois — whether they stay or try to leave Illinois — should pay increased property taxes in order to fund the State of Illinois’ “very large unfunded pension liability.”
By the way, Illinois already has the second highest property taxes in the U.S. as of April 2017 (2.13 percent), only trailing New Jersey (2.31 percent). The three authors of the proposal — Thomas Haasl, Rick Mattoon and Thomas Walstrum — say that “the tax rate required to pay off the pension debt over 30 years would be about 1%.”
That doesn’t mean they want to lower Illinois property tax to one percent. It means that they’re suggesting an additional one percent on top of the already high rate. The increase would make Illinois’ property tax the highest in the country by far.
What’s even more telling is how the authors of the proposal say without saying that the new property tax would dictate how much people who want to get away from high taxation by leaving the state could charge for their home that they would be selling.
According to the proposal:
Current homeowners would not be happy about this, but it would be a good result for the Illinois economy. That’s because the new taxes wouldn’t affect people thinking of moving to Illinois. While they would have to pay higher property taxes, that would be offset by not having to pay as much for their new homes. In addition, current homeowners would not be able to avoid the new tax by selling their homes and moving because home prices should reflect the new tax burden quickly.
Basically, Illinois residents attempting to sell their homes and move to another state would have to drop the price of their home in order to compensate prospective buyers for the increased property tax.
The proposal even admits that people would have a tough time paying the increased tax rate:
Our calculations suggest that, even under the best-case scenario, the additional tax bill is quite high, and some households would certainly struggle to pay it. But given the choice between paying off the debt via higher income, sales, or property taxes, we maintain that the property tax is the best of three painful options.
But the authors of the proposal simply don’t care about the “pain” they cause residents as long as Illinois can pay off the pension debt that they created.
Perhaps the most egregious statement in the whole proposal document is the very last sentence of the proposal’s conclusion.
“In future work, we will explore additional options for spreading the pain, including expanding the base to cover rental and commercial properties, and options for making the tax progressive,” the proposal concluded.
Wow! Illinois is perceived as one of the more progressive states in the country. But now, they are flat out saying that they want to take from everybody, not just the rich.
H/T: Illinois-based Wirepoints