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Chicago Taxes Getting Out Of Control

The City of Chicago is pricing us out of here!  I hate to rant on a Friday, but the most recently passed legislation infuriates me to no end. 

In the last year, here are the major additional taxes that we have been hit with (on top of all sorts of other little increases in fines, fees and taxes that come out of the woodwork ever time I pay a bill):

1) Chicago Mass Transit Tax,part 1- This ridiculous circus act of legislation has been going on for months.  Yesterday, they finally got resolution which involves the Real Estate Transfer Tax (which buyers pay) going from $7.50 per $1000 to $10.50 per $1000!  This additional tax is being used to bail out the mass transit authority.  The alternative was to increase fares from $2 to $3.25.  My husband and I are currently shopping for homes in the $700K range.  This means that when we go to buy, we will have to pay an additional $2100 (net of $7350) at closing.  If the alternative was paying an additional $1.25 at the train station, this means that I will have to ride the CTA 1680 times to break even on this tax.  Like houses were already flying off the market, I am sure this will help, thanks a lot.  This hurts the affordability of buyers and can carry into the equity stake of sellers. 

2) Chicago Mass Transit Tax, part 2- The second part of this textbook case for bad government, involves raising the sales tax from 9.0% to 9.25%in Chicago, and even higher tax increases in the collar counties.  It sucks paying 9.0% in the first place on items that are typically already priced higher because we live in a big city, and it sucks even worse now.  I love Chicago.  I want to support it and especially support local merchants, but personally all this tax increase will do is make me buy more online.  The shift in my spending habits became apparent this Christmas when I calculated that I saved about $150 in taxes by doing a bulk of shopping online for the first time.  From now on this shift to online will only be more dramatic  Instead of figuring out how to trim the fat out a budget, they are now going to get even less from me overall. 

3) The Water Bottle Tax- On January 1 of this year the City of Chicago was the first in the nation to impose a 5 cent tax on bottled water sold in the city.  They hope to decrease plastic waste and generate $10.5 million in revenue by doing this.  I guess tap water was good enough for me growing up, and it is going to have to be good enough again as an adult. 

4) Illinois State Toll Roads-It used to cost .40 or .80 to drive through a toll in Illinois.  Last year those rates doubled to .80 and $1.60.  The relief for this one is that if you have an EZ Pass, you pay the half this, taking the tolls back to their original rate.  So this increase isn't nearly as painful as the first two. 

I majorly simplified what happened with the first two increases in this post.  If you want to find out more detail, I encourage you to click on the links provided.  If you want to read the viewpoints of what other people are saying, check out this page of comments that CBS2 is compiling. 

This whole situation is a big waste of taxpayer money and I fully intend to remember every name that was both involved in it and voted for it next time I am at the polls. 

If you are wondering whether or not our Realtor lobbyist stepped in, yes, they were there.  They are still there.  They just weren't enough of a force against Chicago's corrupt government systems.  Brian Bernardoni, director of government affairs for the Chicago Association of Realtors, made many appearances in Springfield.  Earlier this week, the Realtors group pressured tax-weary aldermen to reject a transfer tax hike it called "anti-business, anti-affordable housing" and incredibly ill-timed in the midst of a housing slump.

"The mayor or whoever crafts the ordinance has a wide range of options, which changes our strategy. But, whoever the tax impacts, it's going to hurt. If they decide to impose the tax on the seller, it's stripping equity. If they apply it to the buyer, it'll be tougher to invest in Chicago," Bernardoni said.

 

 

 

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Comment balloon 8 commentsSara Bonert • January 18 2008 08:18AM

Comments

Taxes now can be more than the monthly note for the house.
Posted by John Walters, Licensed in Louisiana (Frank Rubi Real Estate) over 12 years ago
Hi Sara - I feel your pain! The whole Chicagoland area has taxes that are just outrageous. Real estate taxes in Lake County are insane. The transfer tax imposed on buyers in the City (and several outlying towns as well) is ridiculous. Why penalize people for moving into an area and buying the available homes there? Sales tax is also a huge pet peeve of mine. I used to love taking the train into the City to shop, but why buy anything in the City and pay more sales tax than the suburbs? All these taxes could have huge consequences on tourism, retail, housing...Ugh. What are they thinking????
Posted by Kelly Sibilsky (Licensed Through Referral Connection, LTD.) over 12 years ago
Great post...I see this on 2,5 and 7 all the time. It is out of control. The city needs to cut back or it'll go bankrupt or look for the feds to bail it out.
Posted by Larry Bettag, Vice-President of National Production (Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001) over 12 years ago
Sara, thanks for the post. I also want to share with you that I hink that you have one of the more appealing photos on AR. What I mean by that is that you look very professional, but also friendly as well. That's a hard combination to achieve in a photo. Most I see do not have both.
Posted by Al Maxwell, Real Estate Agent (Keller Williams) over 12 years ago

John- The monthly note is turning into the least of it.   

Kelly- I don't know what they are thinking.  Themselves and not us, it seems to me.  I think this latest tax is a huge mistake that will have major reprocussions.

Larry- Well, I guess we are training people that their mortgage debt can be forgiven, why not the city too?

Al- Ha, thanks! :) 

Posted by Sara Bonert, Real Estate Internet Marketing (Zillow) over 12 years ago
Plus it's what -20 with wind chill. MOVE
Posted by Dick Betts, REALTOR® The Villages, Florida (TOUCHSTONE REAL ESTATE) over 12 years ago
read the headlines! now it will be 10.25.  What do you feel about that?
Posted by omg about 12 years ago

OMG-  I am not familiar with the 10.25 you are referring to?  Can you please respond with a link?  To the best of my knowledge, it is still 10.50. 

So if you are thinking about buying and want to avoid this tax increase, you need to get a contract in TODAY.  Remember it takes about 30 days to close. March 30th is going to be a busy day for Chicagians in the real estate world!

Posted by Sara Bonert, Real Estate Internet Marketing (Zillow) about 12 years ago

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