Posted on 05/15/2018 2:03:25 PM PDT by InvisibleChurch
Illinois homeowners, who already pay some of the nation's highest property taxes, should pay about 40 percent more for the next three decades to wipe out the state's crippling pension debt, according to a trio of economists at the Federal Reserve Bank of Chicago.
The economists argue that paying off the state's $129.1 billion in unfunded pension obligations cannot be done with revenue from new taxes such as a tax on marijuana sales or on financial transactions.
Would you pay 40 percent more in property taxes if it would wipe out the state's crippling pension debt? Yes No See results vote online survey
"In our view, Illinois' best option is to impose a statewide residential property tax," they wrote, in part because it would be fair: "Illinois residents who have benefited most from the past services of governmental employees are more likely to be homeowners, so it seems reasonable that they should pay a larger share of the costs."
They are proposing a statewide tax of 1 percent of a home's value. Under their plan, the tax bill on a $500,000 house would go from about $11,600 to $16,600, an increase of $5,000, paid each year for 30 years.
The economists—Thomas Haasl, Rick Mattoon and Thomas Walstrum—calculated that a property tax equal to 1 percent of a home's value could plug the state's pension gap in 30 years.
Illinois homeowners pay an average of 2.32 percent of their home value in property tax every year, which according to WalletHub is second only to New Jersey's 2.40 percent.
(Excerpt) Read more at chicagobusiness.com ...
Sure, institute a wealth tax to guarantee the mismanaged, overpaid, and corruptly generated pension obligations.
The life of a government apparatchik is easy and comfortable.
*********************************************
Hey! Have some respect for your overlords on the government payroll. The non-government serfs need to have more of their meager earnings confiscated to insure the government overlords have a very comfortable life. Get a second job!
Maybe they can also pass a law that forbids anyone to sell their homes or move until the debt is paid off. And any complaining about these or any tax laws should be a hate crime.
“”Lol, there’s a poll at the linked site:””
Didn’t see it at the site...
I’ve got a better idea. Let’s take an additional 5% out of every public employee’s paycheck and put that into the Illinois pension fund.
Is there an exemption for rental properties Maybe the landlords will just eat it. For business properties? Well, that will just come off the top of the profits...
NOT.
Somewhere along the line the meaning of pension got changed from a stipend to assist in meeting expenses while not working to payment to continue a current lifestyle.
Take your parents with you and leave.
Migrants have been fleeing non productive states since Day One.
My parents fled the overpriced DC suburbs back in 1968. And enjoyed a much more prosperous middle class lifestyle in Texas.
Just leave.
The states, cities, etc. That bought votes with wildly generous pensions are now going to have to do something. They have to go where people’s assets are. There are 3 places that they could go. The biggest for nany are the property taxes. Of course when taxes get too high, it is hard to sell them so the values will go down. The biggest place would try to tax 401K’s more (in other words, steal the retirement by playing a shell game). The problem is that they are based mostly on stocks that are at a all time High. The third is to just reduce the pensions. Any of the three will cause the pitchforks to come out. There will be a day of reckoning.
Reduce the pensions.
“”2.They need to ban pensions in favor of fully funded 401K plans””
If the employer IS the government - state, city or municipal, who kicks in their share? Not being smart - just wondered WHO pays for the employer?
“I’d hate to be in the “late” group trying to escape. Who would buy their over-taxed property? Get out while you are still able to do so.”
This phenomenon is already happening in Mc Henry and Lake country, mentioned on illinoispolicy.org.
“”I’ve got a better idea. Let’s take an additional 5% out of every public employee’s paycheck and put that into the Illinois pension fund.””
OR tax every voter who votes for democrats....I like that!
We fought a revolution for much less.
Electing Democrats always has huge consequences. It’s as dangerous as having random, unproected promiscuous sex in San Fransisco.
Are the people nuts, kidding or just plain stupid? I had no idea the Chicago Fed was so out of touch and clueless. This will be great for Illinois real estate prices... imagine the disaster this will cause.
“Sure, institute a wealth tax to guarantee the mismanaged, overpaid, and corruptly generated pension obligations.”
What’s hilarious about this is that they’ll get that additional money and blow it on anything *but* the pensions! They’re going to be worse off than where they are at in no time!
Allegheny County here in Western PA did this over the years ... they kept on jacking up property taxes to pay off their bloated pensions when the steel industry collapsed ... what happens is that property values stagnate in a best case scenario ... they typically dive in run down areas and generate fresh ghettos for Democratic politicians to exploit. It’s taken almost 40 years for a lot of the Pittsburgh to “recover” ... and there are still areas that are almost as if you walked back into the 1970s (only run down and ghettoish).
The exact same thing is going to happen to Illinois only on a statewide scale. Once people figure out that the idiots in charge are blowing money on anything but pensions, it will be too late and the state will collapse.
These people doing this to taxpayers are f-ing scum.
Complete f-ing scum. I can’t begin to explain the rage I feel thinking of all of those people working so hard to buy a home only to see their hard work become property of the state of Illinois when they can’t afford some outrageous tax bill that allows gubbamint employee to live high on the hog after “working” for the state for a mere 30 years. F-ing disgusting pieces of human trash ... arrrggghhh.
Sounds to me like you are confusing Pensions with Social Security which is different.
Social Security the employee pays half the tax throw withholding and the employer pays the other half. I believe some governments are exempt from social security taxes if they have a sufficient Pension plan.
With a pension the employer pays everything according to the terms of the pension plan. That’s true whether it’s a government or not.
The problem with Pensions is that they are typically defined as x% of your couple of years salary, for the rest of your life. And the funds set aside at the time are usually not sufficient for the eventual liability.
“One way U-Haul business must be peaking.”
That’s what I’m thinking. People won’t be able to sell so eventually they’ll just pick up and leave.
And what do these economists think will happen to the Illinois economy when huge chunks of those pension payments go to Florida every month, never to been seen from again?
So your total tax over 30 years would be 465k on a 500k house. Like having two mortgages. So if you are selling a 500k house it isn’t worth much at all.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.