Search This Blog

Friday, September 11, 2015

Why a City Income Tax is NOT a Good Idea

Why a City Income Tax is NOT a Good Idea

One of the best Alderman in the City of Chicago (Alderman John Arena) has suggested that the city should institute a 1/2% city income tax (which he noted should bring in about 190 million dollars during a WBEZ radio broadcast I agree with what John wants to do about 85% of the time and even when I disagree with him, he always has a fairly good reason for doing whatever he suggests. Any time you agree with a politician at the 85% level you should probably support him in most of what he would like to do.

This time, however,  I disagree with him. Any new tax upon the already overburdened City of Chicago citizen is just not acceptable. Here’s why….

A Chicago Tribune story Chicago Tribune [09-06-2015:] from Sunday September 6th notes the following compared to 2011:

      Vehicle sticker fees have gone up 12%
       Parking taxes have gone up 39%
      Hotel taxes have gone up 78%
     Water/Sewer fees have gone up 73%
      Fines, penalties, etc (includes red light/speeding cameras income) have gone up 28%
      Amusement taxes have gone up 46%  (They are now taxing Netflix and other internet entertainment service providers)
      911 tax has gone up 20%   
 Cigarette taxes have gone up 18%
       Lease tax has gone up 30%

City revenue is up 28% to 1.75 BILLION dollars!

Compared to other cities, the tax burden of a hypothetical Chicago family that makes $75,000/year is 10.4%. This is more than 88 of the other largest cities in each of the states! (

There are almost 30 city taxes that can be applied to Chicago’s citizens (  ).

Chicago also has the second highest taxes on the meals (10.75%) you consume with your family and friends when you go out to a restaurant (

In 2011 Chicago was ranked 5th in having the highest tax burden in the US (

Chicago has the highest sales tax rate in the US (  .

It was noted in 2014 that Illinois already had the 2nd highest property taxes in the US ( ).

Then there are all those Fees the city collects from businesses and citizens ( .

Now remember, on top of all these city taxes you now have Cook County taxes/fees as well. When you compare property taxes among the most populated counties in the US, Cook County is the most expensive!  (  

Another disturbing factor is the cost of fraud and corruption. “Millions of taxpayer dollars are paid out on contracts and other government benefits steered by public officials to insiders who, in turn, shower financial benefits on those public officials and their associates. Recently, Chicago taxpayers saw hundreds of thousands of city dollars funneled to sham minority-owned trucking companies under a program that served to enrich city workers with kickbacks.” (

We do not have an income problem. 

We have an out go problem.

(Actually we have both, but few seem to be paying attention to the out go side of the equation)

You should notice a disturbing trend here. If there is an existing tax or fee, it always goes UP and never goes DOWN! Once the city institutes a Chicago income tax, it will very quickly go from ½% to 1% and higher! Giving our leadership more of our tax money is like pouring gasoline on a wildfire! You will never put out the fire.

There are at least two aspects to a budget. These include revenue and spending. So far we’ve heard a great deal about the revenue side and very little about the spending side. You must attack our fiscal woes from both sides. Until this is done, no City of Chicago income tax should be discussed. Until the city and the unions can reach a meaningful “fix” of the pension problem, no City of Chicago income tax should be discussed. Stop the games. Fix the fiscal abyss that currently has Chicago within its grasp. Do it. Do it now.

OTOH maybe Chicago is not broke?

No comments:

Post a Comment