STUMP » Articles » Taxing Tuesday: Thank Goodness This Isn't About Public Pensions in Crisis » 27 August 2019, 06:30

OR IS IT?

(yes, there will be some pension-related stuff below, and I do have a few more public pensions in crisis posts upcoming this week)

Time for the tax stuff.

OLD STORY: THE TAXES ARE TOO DAMN HIGH IN CHICAGO

Chicago homeowners are suffocating under pensions and property tax hikes

The nation is more than a decade past the Great Recession, and most places are seeing a strong economic recovery and improved living standards.

Not in Chicago, and not in Illinois.

August statistics from the National Association of Realtors noted the city and state’s real estate market has severely underperformed, a trend forecasted to continue in the third quarter of this year. While the Midwest and the nation as a whole saw a very minor dip in home sales and surging Midwest home prices, Chicago missed the wave. Home sales in the Windy City experienced a 13.3% plunge, and the typical home sale price is barely climbing at all.

Chicago homeowners nervously sit on properties that are still worth 30% less, adjusted for inflation, than when the economy collapsed in December 2007. Adding insult to injury, property taxes on those devalued properties are up 20%. And there are fewer potential buyers, with the city and state losing population in each of the past four and five years, respectively.
…
Less than half of every new Illinois property tax dollar in the past 20 years has gone towards core services to improve communities. In Cook County, where Chicago is located, 77 cents of every new dollar for police and fire has gone to pensions instead of protective services. Pensions remain in crisis despite those rising property taxes and a slew of other new taxes at both the state and city levels.

If things seem bad now, just imagine what will happen when the next recession hits. All signs point in the wrong direction. Chicago is the bellwether for a looming national crisis, as its real estate is suffering worst out of the nation’s 10 largest cities relative to before the Great Recession.

So most of the money for Chicago police & fire is going to pensions? And why would that be?

(Chicago Fire is not in the database). So, you paid less than half of the required contributions to the pensions for years, and still don’t make full contributions — and you’re surprised the pensions are a big money sink? Hmmm?

What was that about public pensions not being in a crisis?

PUBLIC PENSIONS IN CRISIS SERIES

Yes, I’m inserting this in my tax post. In case you’ve missed my series on public pensions in crisis, here ya go:

• Part 1: My opinion
• Part 2: Is pay-as-you-go sustainable?
• Part 3: Is it just an accounting problem?
• Part 4: On closing DB plans and replacing with DC plans

I do have a part 5 coming up for tomorrow.

TAX STORIES

• Crain’s Chicago: New group opposing graduated income tax puts Madigan in the middle
• Illinois Policy: CHICAGO DEFENDS TITLE OF HIGHEST SALES TAX RATE IN THE NATION
• Lightfoot to ask legislature for power to tax high-end professional services and big-ticket home sales
• Rockford mayor’s message: ‘We’re overtaxed’
• US and France reach compromise on digital tax
• Democrats’ bid to get Trump’s tax returns before the 2020 election isn’t looking good – this is so incredibly stupid.
• Most Connecticut cities and towns increased property taxes this year
• San Francisco Soda Tax Money Used For More Drinking Water Stations At Schools, Parks
• Norwalk tax assessor, assistant tax assessor resign
• How much will you pay annually? The Alabama gas tax hits stations Sunday
• Germany’s SPD wants to target super rich with wealth tax
• The Onion: Pros And Cons Of Tax Exemptions For Religious Institutions
• Shrinking your tax burden can come with consequences. Here’s what to avoid
• Taxes, guns, endangered species, and sex
• Trump’s banks won’t tell court if they have his tax returns
• India lost ₹15 trillion trying to make ₹14 billion from tax surcharge on investors

On that last item — gives an idea for those who try wealth or transaction taxes.

The power to tax is the power to destroy — and yes, the people who propose these taxes know it, and the destruction is not an unfortunate side effect, but what they intended.

Now, if they’re so stupid to not realize the power of taxation, then they shouldn’t be given that power.

TAX TWEETS

Trees are the Answer: To reduce impact of human CO2 emissions on atmospheric levels of CO2. Suck it up with trees and use more wood instead of steel and concrete.
In New "Mind-Blowing" Study, Planting Trees Reduces Carbon Better Than Carbon Taxes https://t.co/Ch1P1WMVEi

— Patrick Moore (@EcoSenseNow) August 27, 2019

This is a huge failure of Europe. The main tax heaven is an EU country, allowing massive tax shifting and, yes, tax evasion. This must stop https://t.co/0luW7Id0e5

— Luis Garicano (@lugaricano) August 27, 2019

Wisdom of Modinomics in one line:

India LOST ₹14.7 TRILLION trying to make ₹14 billion from tax surcharge on investors.#Masterstroke https://t.co/4dgXd6pV7z

— Ravi Nair (@t_d_h_nair) August 27, 2019

NEW | "You might never watch the BBC, but if you watch any other UK tv channel then you’ll need to pay the licence fee. Frankly it’s unsustainable – and I haven’t even touched on politics." – Councillorsuzie</a> <a href="https://t.co/quYQxxRlaf">https://t.co/quYQxxRlaf</a></p>&mdash; Free Market Conservatives (FMConservatives) August 27, 2019

Before they do that, I’d like an enquiry into why Brown:

sold off our gold on the cheap

wrecked pensions with his stealth taxes

turned millions into benefit junkies with his disastrous tax credits

basically fucked the whole country’s economy

https://t.co/N8UK1zpZJa

— Voice of Reason (@brexitblog_info) August 27, 2019

My first day of work is already a pressure.

Had a meeting with our tax auditor headed by Atty. Rafal-Roble (Top 3), my future professor in Taxation Law.#TeamArellano pic.twitter.com/qP9kF9W2CV

— Chavez, CPA (@ChavZzzzz) August 27, 2019

Have fun with the audit!

Australians are being ripped off to the tune of $7Bn by cash in hand deals designed to dodge the tax man. The Tax Commissioner is aiming to claw that back with a high tech crackdown on contractors and other small businesses who are rorting the system. Riley7News</a> <a href="https://twitter.com/hashtag/auspol?src=hash&amp;ref_src=twsrc%5Etfw">#auspol</a> <a href="https://twitter.com/hashtag/7NEWS?src=hash&amp;ref_src=twsrc%5Etfw">#7NEWS</a> <a href="https://t.co/CwxLhpInjt">pic.twitter.com/CwxLhpInjt</a></p>&mdash; 7NEWS Sydney (7NewsSydney) August 27, 2019

“Rorting?”

Oh, it is a thing:

rort (plural rorts)

(Australia, New Zealand) A scam or fraud, especially involving the misappropriation of public money or resources.

Ah. I learned something.

Raising taxes for everyone. pic.twitter.com/R758c0wahw

— OffBeat-eimmaJ (@OffBeat_eimmaJ) August 27, 2019

I just assume Bernie deliberately wants to destroy wealth. Because he was smart enough to collect more houses than others own, so I assume he knows what taxes do.

Deutsche Bank and Capital One Financial have until Tuesday by 4 p.m. to tell the court if they are in possession of any of President Trump's tax returns. If they won't answer they need to explain in detail why. Here's today's court order pic.twitter.com/emc4xETzQL

— Susanne Craig (@susannecraig) August 26, 2019

Yeah, y’all waste time on that crap. It’s better than passing destructive taxes.

"What will I do if Trump gets reelected? Get a significant tax break." Dave Chappelle.

— Carmine Sabia (@CarmineSabia) August 27, 2019

Wait, Trump’s got more tax cuts on the way? (there has been some chatter over a variety of potential tax cuts, but I think it’s all leaks & rumors right now…and the normal August silly stuff)

See you next week with more tax stuff!