How to Combat High Chicago Taxes

Apparently I’m the last person to know this but effective January 1 sales tax throughout Cook County went up 1%. Taxes are a necessary evil in a civilized society but at what point do we say WTF?

January 2016 Eataly Sales Tax 11.50%

City of Chicago Sales tax

State/County/RTA                                9.00%
City of Chicago                                       1.25%
Total for merchandise and non-downtown dining:                                              10.25%
Downtown dining taxes:
McPier Tax (see below)                         1.00%
Downtown restaurant tax                      .25%
Tax on dining downtown is      11.50%.

McPier Tax is a City of Chicago sales tax (since 2009) on restaurant dining within a certain areas of the City map. The boundaries are: Stevenson Expressway, Ashland, Diversey, the Lake and also includes O’Hare and Midway Airport.

Here’s the other tax damage for 2016:

• Property taxes

The $589 million property tax increase will start hitting later this year and will phase in over a four year period. The assessors office is in the process of reassessing our properties. The largest increase, $319 million, will hit our second installment in August, $109 million in 2016, $53 million in 2017 and finally, $63 million in 2018.

Estimates are the tax bill on a $250,000 home will increase by nearly $300, and by about $1,670 on a $500,000 business property. Per the Sun-times that hit is going to vary widely depending on which ward you live in or where your business is located.  The 42nd ward, which includes the Loop, already pays 25% of all property taxes in the City of Chicago so huge increases are likely. People are already talking about moving.

• Chicago Public Schools: taxes will also be increasing on our second property tax installment for the CPS. A $250,000 home will be charged about $51, and the owner of a $500,000 business about $335 depending on which ward you’re located in.
• Garbage tax increase: Owners of single-family homes, duplexes, three and four-flats in Chicago will pay a new garbage fee of $9.50 a month per month or $119 per year per unit.  This will appear on water bills sent out every other month. Senior citizens will pay half that amount.
• Hotel tax: May 1 increases 1% to 17.4%.
• Metra: On Feb. 1 Monthly passes increased $2.50 increase,  ten-ride tickets $1.75, and single trip tickets increased by $.25.
• “Netflix” tax: this is the extension of the 9 percent amusement tax to include paid subscriptions for streamed digital music, rental movies, TV shows and games.
• Taxicab fares: Increased 15 percent on December 31, 2015.
• State of Illinois: Speeding by 26 mph or more in a construction area or near schools will be a misdemeanor criminal charge, with fines of up to $2,500 and the potential for a jail term of up to one year. And it will be a $75 fine for parking a nonelectric car in an electric car space. Also Driver’s license and state ID expediting will cost $75.
• Ride Share: Increased Jan. 1. 20 cents a trip and higher during surge-pricing periods. Also a $5 fee is added to ride share pickups and drop-offs at Midway, O’hare, McCormick Place and Navy Pier.

So are you thinking about moving now?  Where do we go?

Before calling the realtor and packing up our junk remember most states are poorly managed fiscally and otherwise, have weather problems (flooding, fires, harsh winters, scorching summers, tornadoes, hurricanes), earthquakes, crime and the biggest problem – nothing to do. How many times can you visit Old Faithful? Who wants to live someplace that’s cheaper but has nothing to do?

As a reader of this site you know that we are extremely fortunate that there is an almost endless array of free and cheap things to see and do and eat and drink. The reality is that we pay for some of this through our taxes.

So what can we do to combat these tax increases?

• Vote. Traditional pensions have been an untenable compensation vehicle since the beginning of time.  They need to go.
• Move to a smaller home, condo, apartment.
• Move to a less expensive neighborhood. (Just hope you aren’t gerrymandered into a more expensive ward later).  Per the Sun-times:
  • The 42nd ward (Loop mostly) pays 25% of all property taxes in Chicago or $1.1B
  • Seven wards surrounding the 42nd ward pay another 25%:
    • 2nd Gold Coast, Streeterville, Wicker Park, Bucktown $238m
    • 3rd South Loop along Lake Michigan $100m
    • 4th South Loop west of 3rd ward, Chinatown $100m
    • 27th West town$129m
    • 32nd Wicker Park and Bucktown $156m
    • 43rd Lincoln Park north of Diversey, Boystown, Lakeview $210m
    • 44th Lincoln Park $147m
    • Some areas of the west and south side may get property tax reductions.
• File an appeal on your property taxes.
• Utilize various methods to save money on .
• Adjust your budget. If your taxes or rent increase cut spending in other areas that aren’t important like cut your cable or take less taxi’s or Ubers.
• Earn more money.  Once you cut your cable spend the time, previously spent watching, working. Get a part-time job.
• Spend less money. Spend the time, previously spent watching television, working to find the best deal on everything you buy from groceries to cell phone service to dining out. Buy everything on sale or at a discount. This website provides daily free and cheap things to do and eat and drink as well as tips and ideas on how to save money on everything.
• Buy things in other counties. Obviously it wouldn’t make sense to drive to Lake County or DuPage County to buy gas and groceries unless you’re going there anyway but a $1,000 or more refrigerator, television, furniture etc. could be $25 savings or more depending on which municipality the store is located in.  You could “showroom” the purchase at a close-in store then call the Lake or DuPage County location and see how low they will go. You should compare delivery costs also.
• Buy things you can pack in a suitcase when traveling to low or no sales tax states: AK 1.69%, MT 0%, NH 0%, DE 0%, OR 0%. HI 4.5%, WI 5.5%, WY 4%, and ME 5.5%.
  • I’ve bought Bose headphones, the laptop I’m typing this on and clothing in OR. There are several shopping malls one or two stops from the airport on the MAX Red line train.  You can also buy things at PDX airport as it is the only airport that has a no-price gouging law.  Things cost the same as at non-airport properties such as wine.

In summary don’t flee to a less desirable and inexpensive area.  What’s the point of living someplace cheap where there’s nothing to do?   Spend the time to find ways to spend less and earn more in order to live in one of the greatest cities in the world.

_____________________________________________

It wasn’t all bad news out of the Legislature last year.  Our busy elected officials found time to make pumpkin the official state pie effective Jan. 1.  I wonder how much the secret Pumpkin PAC contributed to receive this honor?

____________________________________________________________________________________________