STUMP » Articles » Taxing Tuesday: Taxes for Old, Taxes for New? » 10 December 2019, 05:19

Where Stu & MP spout off about everything.

Taxing Tuesday: Taxes for Old, Taxes for New?  

by

10 December 2019, 05:19

Column: Twitter exchange with Cook County assessor sums up outrage and exodus: Tax hikes are paying for debt, not services.

Over the weekend, while most of us powered through a collective turkey coma, the Cook County assessor’s office engaged in an entertaining Twitter exchange with a taxpayer who joked about her property tax payment.

“My banking app just flagged my Cook County property tax payment as ‘possible theft or fraud’ and they really do not know how right they are,” tweeted Emily Zanotti, a local writer and editor with a Twitter following of more than 57,600 users. Zanotti generally tweets about politics, culture, Catholicism and her babies — don’t miss the babies — but on Saturday, she hit a nerve with Assessor Fritz Kaegi’s office while tweeting about taxes.

(note: I liked & retweeted Zanotti’s tweet)

Cook County’s second installment property tax payment, collected through an escrow account, had been transferred out of her bank, triggering an automatic fraud alert due to its size. Several hours after her tweet, a communications staffer for the assessor replied defensively: “Your local schools, parks, and libraries — not to mention your police and fire departments — are grateful for your payment.”

Zing!

Not really, though. Let’s break it down.

The typical retort when taxpayers gripe about taxation is to point out the services rendered in exchange. Public schools, public safety, park districts and libraries largely are funded through local property taxes. So quit your whining.

But that isn’t the whole story in Illinois, Chicago or Cook County, where property tax hikes levied and collected increasingly are being swallowed up by pension costs for retired workers, health care costs for active workers and debts accumulated to patch up unbalanced budgets. Property owners and income tax payers are getting the same or fewer services while their tax bills climb and their property values remain stagnant.
……
An Illinois Policy Institute report last year found that less than 50 cents of every new dollar paid in property taxes across the state between 1996 and 2016 went toward services. Pension obligations and worker benefits, along with bond and interest payments from borrowing — not new park district programs or additional police officers or equipment at the library — are swallowing up the increases in tax hikes.

There you go.

Some things were just not all that smart to do, btw, official tweeter. Zanotti tweets all sorts of things, because it’s her personal twitter account. It’s not a handle intended to represent an office.

Because this:

Was not a smart thing to do, in my opinion.

Seriously, you can ignore people’s tweets. The stupid thing was responding to Zanotti in the first place. You can let it go.

MORE TAX PAIN TO COME TO CHICAGO

This is an easy prediction, but I like easy predictions.

Wirepoints: Expect property tax hikes to hit Chicago’s stagnant home prices hard

More taxes on the way

Unfortunately, more property tax hikes are likely on the way thanks to the structural holes in the mayor’s budget, the city’s ever-growing pension costs, and the new CPS teachers contract.

…..
On top of those [hundreds of millions of dollars] holes, higher pension payments alone will cost the city $600 million more in 2023 than what it will spend in 2020.

And even more pressure is coming. The city’s police and fire unions are likely to make big demands in their upcoming contract negotiations, particularly since Lightfoot granted the CTU what she says is the “most generous contract” in the union’s history.

The above also doesn’t include the property tax increases needed to pay for Chicago Public Schools’ new contract. CPS’ expenses will be at least $500 million more annually by the time the new contract is fully implemented in five years.

In the end, Lightfoot could end up hitting Chicagoans with an additional $1 billion in property taxes just for the city itself. And CPS will cost Chicagoans even more.

I assume that’s $1 billion per year he’s talking about.

Let’s figure how much of an increase that would be.

Grabbing the 2018 CAFR (page 196), I find out property tax revenue is….

$1.4 billion.

So a $1 billion increase would be quite the increase to get it there. Just over 70%.

Looking above at the guy mad over a 40% increase…. how angry do you think property owners in Chicago would generally be with a 70% increase?

Hmmm.

TAX STORIES

I kinda hope Trump’s tax returns do get released, because I really want to see how much more stupid commentators can be about taxes.

TAX TWEETS

O.O

Look, guys, I don’t want to talk taxes during sex. Really.

and the jumping-off of pop culture that nobody asked for:

News you can use:

And yes, Social Security benefits do get hit by income tax, sometimes:

How is Social Security taxed?

If your total income is more than $25,000 for an individual or $32,000 for a married couple filing jointly, you must pay income taxes on your Social Security benefits. Below those thresholds, your benefits are not taxed. That applies to spousal, survivor and disability benefits as well as retirement benefits.
…..
All of the above concerns federal taxes; 13 states also tax Social Security to varying degrees. If you live in Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, North Dakota, Vermont, Utah or West Virginia, contact your state tax agency for details on how benefits are taxed. West Virginia is phasing out state taxation of Social Security and as of the 2021 tax year will no longer tax benefits for most residents.

The federal income taxation of Social Security benefits has been around for over 20 years, btw. [the above info is from April 2019]

This is one of the many ways Social Security benefits were cut in the 1990s… it was done via increasing the full retirement age (ramped up from 65 to 67), allowing this taxation, and some other things I forget. Direct cutting of Social Security is a tough thing to do politically, but these indirect approaches? It’s more difficult to tell what, exactly, the cuts are, and the arguments make some sense.

See y’all next week!


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