Tuesday, February 5, 2008

Taxes, taxes, taxes...

I do not own property in the City of Chicago, but my clients sure do. And they are about to get taxed even more for doing their business of buying and selling property.

Yup. We're talking a 40% increase in the real property transfer tax, from $7.50 to a whopping $10.50/$1000. Note that in Chicago the buyer typically pays this tax instead of the seller (in rare cases the tax is split between the parties), thus making a down payment harder to raise. We call it the "Welcome to Chicago Tax." This can have an overall chilling effect on property sales and prices.

And why? The money will "be used to finance the restructuring of the CTA's employee pension and retiree health-care plans." Great. We overspent everywhere else, so now we have to tax more to protect the retirees. Let me make one thing clear: I am not anti-pension. My grandmother's companion is a CTA retiree, and I do care about this and about all retirees. I just wish we'd cut somewhere instead of just taxing people all the time. We all know there's plenty of places to do it.

Thanks to Peter Olson for pointing this out.