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Question of the day

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Illinois

First, the setup…

In an effort to be “creative and innovative,” a Cook County commissioner Wednesday proposed a county tax swap: Eliminating the county’s share of homeowner property taxes while boosting the county share of sales tax by 2.25 percentage points.

Such an increase would boost overall sales taxes in Chicago to 11.25 percent. […]

Moreno also hopes the plan will bring in up to $60 million a year in new revenue for the cash-strapped county, which again is facing a budget deficit.

Moreno… wants property owners to continue paying their taxes, with the county issuing rebate checks to residential homeowners.

What do you think of this idea?

posted by Rich Miller
Thursday, Sep 6, 07 @ 9:27 am

Comments

Where are all the “Fair” Taxers? If this goes through, they’ll be slowly getting their wish to dramatically increase sales taxes on middle America.

I think what Cmr. Moreno ought to look at more closely is cutting out the fat. And, unlike many other local governments, the county does have some trimming it could do.

Comment by Rob_N Thursday, Sep 6, 07 @ 9:35 am
It’s different. It addresses the high property taxes in Cook County (and the dwindling tax base). And, it widens who pays for Cook County services (all those who buy goods and services in Cook County). But is it fair? Some could argue that, why should who don’t live in Cook County pay Cook County’s taxes? Perhaps a more modest swap would be more fair?

Comment by Doodles Thursday, Sep 6, 07 @ 9:40 am
I am glad I don’t live in Cook County. What will happen is they will raise Sales Tax, then decide the property tax needs to stay too.

Comment by He makes Ryan Look like a Saint Thursday, Sep 6, 07 @ 9:46 am
Sales taxes are actually less regressive than property taxes, since they bear a strong correlation to income (you can only spend what you make)whereas property taxes bear littel or no relation to income. But if the rebate is only for residential property, it would be vital that apartment buildings, which are in a separate assessment category in Cook, are also subject to the rebate and that landlords are required to pass the savings along to tenants; otherwise this proposal would be massively regressive and unfair to renters.

Comment by Anonymous Thursday, Sep 6, 07 @ 9:50 am
This is a terrible idea. It further shifts property tax liability onto commercial and industrial properties. The same people that get the short end of the “7% Cap” are the same people that will be hurt by this idea. Nice to see Cook County continue to look for more revenue as opposed to making some much needed cuts.

Comment by Gene Parmesan Thursday, Sep 6, 07 @ 9:51 am
Cook County is a bloated, ruinous government whose sole intent over the past twenty years is to provide patronage jobs for friends and families. It has become a jobs program instead of a county government. It is unbelievably incompetent and oversized. It’s budget is reflective of it’s lack of a mission and purpose.

Cook needs to cut it’s budget by 25%. It needs to phase out jobs. It needs to eliminated nepotism. It needs to be completely reformed. It is killing the City.

No more taxes should be raised. The time has come for Cook county to clean up it’s act before it gets another dime.

Comment by VanillaMan Thursday, Sep 6, 07 @ 9:52 am
Many homes in Cook County are modestly priced so the savings to homeowners from the county are going to be not just offset but exceeded by the sales tax increase, unless the consumers are smart and choose to shop in DuPage or Lake.

Comment by cermak_rd Thursday, Sep 6, 07 @ 10:00 am
Not knowing much about the tax situation in Cook, I wonder why, with so many billions of dollars in new construction downtown, and gentrification in older neighborhoods, and the boom in new construction in recent years, property tax receipts are not going through the roof? Is EVERYTHING built on a these days?

Comment by Puzzled Thursday, Sep 6, 07 @ 10:00 am
“on a TIF….” Sorry.

Comment by Puzzled Thursday, Sep 6, 07 @ 10:01 am
VanillaMan nailed it. The idea that Cook County government needs more revenue (or the same revenue but from a different source) is absurd.

The residents voted these people into office, though. Kane County looks better every day.

Comment by Lefty Thursday, Sep 6, 07 @ 10:02 am
Sounds like a “Great” plan! They will assure that everybody simply goes to the collar counties to make their larger purchases. I’d hate to be a car dealer, especially one trying to sell cars in Chicago.

Chicago has chosen to spend themselves to death and then they have assumed the role of a municipal “welfare queen” so that the rest of the taxpayers in Illinois can bail them out. It must be embarrassing for Chicago residents to tell others where they live when they are at social gatherings. Chicago couldn’t exist if the rest of the state didn’t prop it up with their necessary financial “fix”. Hence, Chicago needs to retain it’s control of Springfield state politics.

Comment by Aaron Slick from Pumpkin Creek, Il Thursday, Sep 6, 07 @ 10:03 am
Absolutely catastrophic idea. The most regressive tax possible. On average, sales taxes fall most heavily on the poorest, more so than property taxes. To those who think otherwise, go look it up. The Minnesota Taxpayers Association has especially good data on this, I wish there was an Illinois equivalent (it could watch over these wasteful placeholders at the county while they’re at it too). And 11.25 percent sales tax would mean absolute death to Chicago and Cook County retail.

Comment by Angry Chicagoan Thursday, Sep 6, 07 @ 10:09 am
Bad bad idea. Oh yea, they’ll be sending out your rebate checks….checks in the mail. Moreno is an embarassment to all of the commissioners.

Comment by downhereforyears Thursday, Sep 6, 07 @ 10:14 am
With 60 mil. in new revenue they might be able to open up the toboggan slides again. I am all for it. Heck, why not make it an even 15 cents per buck and we can have someone pick up the trash in the forest preserves as well.

Comment by Garp Thursday, Sep 6, 07 @ 10:16 am
Gene P.

This idea does not shift the burden to commercial property owners. By making the residential property owners pay the taxes they stay in the mathematical calculation in regard to assessments, levy’s and rates. The only difference is the county is coming in and bailing out or subsidizing the residential payers and not the commercial payers.

Either way it is still a bad idea. If there is ever a recession and there will be one day, do you trust the county to rebate the property taxes. As the sales tax revenue decline the commissioners will be faced with the prospect of cutting services or rebating the taxes that have already been paid. Fat chance!

Comment by In the Know Thursday, Sep 6, 07 @ 10:17 am
There are a couple separate issues here.

1. We do need comprehensive tax reform. The tax burden should be shifted from property taxes (that primarily hit middle class people) to the federal income tax (that primarily comes from higher income Americans, the ones who are making more-and-more each year)..
2. Cook County needs to cut waste. This needs to be done for moral reasons and to boost confidence in Cook County government. Until the political elites tighten their belts, it’s hard to convince me that Cook County taxpayers should open their wallets. Let’s see some shared suffering.

Comment by Carl Nyberg Thursday, Sep 6, 07 @ 10:18 am
What a boom for Indiana. If you live Calumet City or Lansing, everyone alraedy buys everything in Indiana. Look at the border, there are few stores on the Illinois side already. This will shutter the rest of them.

Comment by Mr. Ethics Thursday, Sep 6, 07 @ 10:20 am
I love the idea of reducing property taxes but I think the proposal would further harm the trade show industry in Chicago.

Comment by Larry Mullholland Thursday, Sep 6, 07 @ 10:38 am
I think property taxes are such a huge issue because, if you do not escrow your payments, the tax bills are often stunning if not upsetting. It’s another expense and inconvenience that comes due twice a year if you are not on the monthly plan.

Most Americans don’t think twice about automatic payments or withholdings. If you have your IRA and healthcare withdrawn from your pre-tax monthly salary, you typically don’t realize how much less you are paying in taxes and are happy you don’t have those two extra monthly bills hanging over your head. The same goes for

I think property taxes are ridiculous and oppressive. How many times do you have to pay a tax on other items you own? When was the last time you had to pay a tax on your car? Or your suits? And if you don’t pay your property taxes, the government can seize your house.

So I guess any attempts to taxe property taxes down a notch is welcomed from my POV.

Comment by Team Sleep Thursday, Sep 6, 07 @ 10:46 am
Aaron Slick:

Actually the car dealers are the best off. Regardless of where you buy your car, you pay the County taxes of the area in which you reside. It’s lousy and evil, but that’s the way it is. I’d love to have a word or two with the idiots that passed that law!

And be careful with your complaints about governmental entities. Chicago is a separate governmental entity that happens to exist within Cook County. It is Cook County that is at issue here, and Cook County makes Chicago look like it has a well-run, financially sound government.

Comment by cermak_rd Thursday, Sep 6, 07 @ 10:50 am
Wouldn’t it be more fair to start an piggyback on the state income tax?

Comment by LM Thursday, Sep 6, 07 @ 10:57 am
Under this proposal taxes on meals in Chicago restaurants would jump to 12.25%, and 12.5% in the very liberally defined “downtown” area. Would this be the tipping point at which restaurants are hurt?

Moreno should take a “creative and innovative” look at cutting waste in Cook County government.

Comment by Independent Thursday, Sep 6, 07 @ 11:55 am
Is Moreno sniffing the same glue that the Blowdryed-one was when he came up with the gross receipts tax?
How can they be so stupid? There is just NO WAY that people will stand for ANY KIND of increased taxes. Regular people are facing substantial increases in the costs of everything from gasoline and milk to vehicle stickers and postage stamps.

CUT JOBS at the City, County, and State levels — IF anyone notices THEN maybe there might be some support to raise taxes to get back services. Until that happens forget any idea to raise taxes…

Comment by incompetant Thursday, Sep 6, 07 @ 12:27 pm
Moreno should take a “creative and innovative” look at cutting the number of his relatives on the Cook County payroll.

Comment by Guy Fawkes Thursday, Sep 6, 07 @ 12:28 pm
Correction: Chicago restaurant meals would be taxed at 11.5%, downtown at 12.5%.

Comment by Independent Thursday, Sep 6, 07 @ 12:51 pm
One other thought. This would be a huge redistribution of wealth away from renters, mostly to owners of large houses, especially recently built large houses. It would tax necessities very heavily, rebate property taxes to the homeowners but not the allegedly “greedy” landlords, and nothing at all for renters to offset the sales tax, not even the prospect of lower rents. Is that what Moreno really wants?

Comment by Angry Chicagoan Thursday, Sep 6, 07 @ 1:18 pm
It’s idiotic. For middle class and upper class taxpayers, a county wide sales tax is easily avoided. For the inner city poor, it is not. From my own experience with cigarettes, the onerous Cook County tax on cigarettes make it cost effective for me to buy in DuPage. The same thing would happen regarding every major purchase that my family would make. We would simply head out to DuPage to buy instead of buying it from retailers in Cook, thereby avoiding the tax. Plus, I’ll get a drop in my real estate taxes so its win-win for me If Moreno gets this through (he won’t of course) the poor will end up shouldering an even greater portion of the County tax burden.

Comment by Tom Thursday, Sep 6, 07 @ 1:34 pm
This would be a huge redistribution of wealth away from renters, mostly to owners of large houses, especially recently built large houses.

No kidding… and the progressives will try and tell us it’s progressive.

Comment by Bill Baar Thursday, Sep 6, 07 @ 1:34 pm
Those owners of larger newer houses need breaks now the markets gone soft.

Voters must look like such chumps to these Pols.

Comment by Bill Baar Thursday, Sep 6, 07 @ 1:42 pm
One of my hot buttons is confusing the message with the messenger but every rule has an exception and Commissioner Moreno is always an exception. I’ve spent too many hours in County Commissioner meetings to believe a thing he says. To the extent he bothers to get involved in the discussions, it is to say one thing and then vote the opposite. He must think he is covering all bases.

This proposal sounds like a way to get more paper-pushing jobs for his relatives.

(Sadly he is not the worst of the lot. One of his colleagues argued yesterday that we should expect that people who lose their job will be come a drug addict. That’s the way life is.)

Comment by Redbright Thursday, Sep 6, 07 @ 1:58 pm
I normaly abstain from issuing an oppinion, but in this case I had to put in my two cents. The comments made based on coverage by the journalist are incorrect, this proposal calls for eliminating ALL of the Cook County portion of property taxes including residential and commercial, no shifting here. I would be careful to base attacks on people on incomplete covereage by a writter who picks and chooses what to write. The proposed ordinance is new, has anybody read it before talking????

Comment by sunshine Thursday, Sep 6, 07 @ 2:35 pm
To Lefty: Until the Democrats take over Kane County. Then where you will go?

Comment by Kennedy-esque Thursday, Sep 6, 07 @ 3:26 pm
Does anyone actually think that the county would cut the rebate checks?

They’ll come up with some excuse as to why they can’t, they need that money, blah, blah, blah.

If Moreno was actually serious, he’d call for the abolition of the property tax that Cook County takes in and then raise the sales tax. But we’ll see pigs fly before that happens.

Comment by Anon from BB Thursday, Sep 6, 07 @ 3:28 pm
Schools are responsible for the biggest chunk of property taxes in Cook County–over 60 percent, I believe (I can’t find my tax bill at the moment).

I could see local schools and communities viewing the elimination of the County tax as a vacuum and taking advantage of it upping the property tax more than they would have had the change not been made-the same risk we ran with the tax swap, which is still bobbing around out the in never-give-up land.

Not to say I don’t appreciate Moreno at least raising the possibility of doing something different. Unfortunately, there is no free lunch.
However, there is the possibility of a truly progressive income tax which means some are closer to a free lunch than others. That’s really the only fair solution. All these other schemes–the GRT, the tax swap, and so on are imperfect approximations of a progressive tax.

Comment by Cassandra Thursday, Sep 6, 07 @ 3:59 pm
the chance of cook co rebating any tax to taxpayers is zero. This is a tax grab if you trust a crook co politican your nuts. The politicans will have your property tax money and the chance that them seeing that money sitting there and not finding a need for it besides rebating it to you is zero.

Comment by FED UP Thursday, Sep 6, 07 @ 5:48 pm
The County needs to explain why they are short $$. I have friends who are Chicago public school teachers who have to buy their own classroom supplies. Other friends who have a daughter at Walter Payton, a public school, had to pay $400 for her senior class fees. Basing a budget on sales tax receipts is not good planning. Look at what happened after 9/11. People stopped spending, sales tax receipts went down and the State was no longer flush. Spending behavior is not a reliable funding source.

Comment by Emily Booth Thursday, Sep 6, 07 @ 9:20 pm