An "Audible
Gasp" Was Heard When The Chicago Fed Unveiled Its "Solution" To
The Pension Problem, submitted by Mark Glennon of Wirepoints and posted by
Tyler Durden, Zerohedge 5/12/18
An audible gasp went out
in the breakout room I was in at last month’s pension
event cosponsored
by The Civic Federation and the Federal Reserve Bank of Chicago. That was when
a speaker from the Chicago Fed proposed levying, across the state and in
addition to current property taxes, a special property assessment they estimate would
be about 1% of actual property value each year for 30 years.
Evidently, that wasn’t
reality-shock enough. This week the Chicago Fed published that proposal
formally. It’s linked
here.
It surely ranks among the
most blatantly inhumane and foolish ideas we’ve seen yet.
Homeowners with houses
worth $250,000 would pay an additional $2,500 per year in property taxes, those with homes worth
$500,000 would pay an additional $5,000, and those with homes worth $1 million
would pay an additional $10,000.
Is the Chicago Fed blind
to human
consequences?
Confiscatory property tax rates have already
robbed hundreds of thousands, maybe millions, of Illinois families of their
home equity — probably the lion’s share of whatever wealth they had.
Property taxes in many
Illinois communities already
exceed 3%,
4% and even 5% of home values. Across Illinois, the average is a sky-high 2.67
percent, the highest
in the nation.
In south Cook County
they already
average over 5%. Most of those communities are working class, often
African-American. The Fed says maybe you could make the tax progressive by
exempting lower values, but that’s very difficult to do and, if you did somehow
exempt the poor and working class, the bill pushed to the others would be
astronomical.
Those rates have already
plunged many communities into death
spirals,
demanding an immediate solution, but the Chicago Fed apparently wants to pour
on more of the accelerant.
Don’t they understand that
people won’t build on or improve property when property taxes are that
high? When taxes are 3 percent to 6 percent, any value you add to your home is going to be
taxed at that high rate forever. Have they never been to our communities with
countless dis-repaired, abandoned homes and commercial properties, which are
the result?
Get this, which is part of
the Fed’s reasoning: “New taxes wouldn’t affect people thinking of moving to
Illinois. While they would have to pay higher property taxes, that would be
offset by not having to pay as much for their new homes. In addition, current
homeowners would not be able to avoid the new tax by selling their homes and
moving because home prices should reflect the new tax burden quickly.”
In other words, just confiscate wealth from current owners because they
will pay, whether they stay or not, through an immediate reduction in home
value.
This proposed tax would
only address the five state pensions. What about the other 650-plus
pensions in
Illinois, particularly those for overlapping jurisdictions in Chicago which are
grossly underfunded? The Fed was asked that at last month’s seminar and they,
without explanation, said they didn’t bother to cover that.
I’ve earlier met Rick
Mattoon, one of the Chicago Fed authors of the proposal. He’s a smart, likeable
guy who I thought had lots of interesting information. For the life of me,
however, I can’t understand how he would put his name on this proposal.
Property can’t leave, so
seize it. That’s the basic idea.
Norb Leahy, Dunwoody
GA Tea Party Leader
No comments:
Post a Comment