Chicago Ranks as Highest Taxed City in the Nation
This article covers the topic of how Chicago ranks as highest taxed city in the nation:
In this article, we will cover the following topic:
- Chicago’s beauty and financial crisis
- Ranking as the highest taxed U.S. city
- Financial irresponsibility by politicians and corruption
- Mass exodus from Chicago and Illinois due to high taxes
- Cost of living in Chicago versus suburbs
Chicago is in big trouble. Having the rank of the highest-taxed U.S. city is not making a dent in the finances of the city. The combination of incompetent politicians who are clueless and financially irresponsible is leading the city to the road of bankruptcy. In this article, we will cover the financial mess facing Windy City.
The Landscape of the Nation’s Largest Second City
Chicago is the nation’s second-largest city.
Downtown Chicago is probably the most beautiful city in the world. Chicago is home to three of the world’s largest buildings. It is also the home of major colleges and universities. Chicago has a major international economic engine for all industries.
The city borders beautiful Lake Michigan. Chicago also attracts millions of national and international visitors. Recent data shows Chicago Ranks As Highest Taxed City in the Nation. There are thousands of Lake Front condos that attract many primary and second home buyers to the City.
Chicago has the best-rated restaurants, including internationally ranked ethnic restaurants. Chinatown is ranked as the third-largest in the Nation. Like many major metropolitan cities, Chicago has its own issues. Recent data shows Chicago ranks as highest taxed city in the nation.
Even with the highest tax rates out of any major U.S. city, the city still is financially strapped. This is primarily due to financial irresponsibility and major pension debt.
The city is looking for ways to increase taxes. Mayor Lori Lightfoot and city politicians are banking on revenues from marijuana sales. This will go into effect on January 1st, 2020. In this article, we will cover and discuss how Chicago Ranks As Highest Taxed City In The Nation.
Chicago Ranks as Highest Taxed City Along with Two Other Cities
Chicago Ranks As Highest Taxed City along with two other cities.
The city is counting on solving its financial deficit sooner than later. The City’s sales tax keeps on increasing due to revenue shortage. The city attracts millions of visitors, both national and international.
Chicago Ranks As Highest Taxed City in the Nation is hurting taxpayers. The City also has the highest out-migration rate of any other major city in the U.S. Countless taxpayers are leaving the city due to its high taxes.
The city ranks as having the highest combined state and local sales tax rates in the country. The data comes from a recent report from the Tax Foundation.
Costs of Living in Chicago
It is one thing of living in a city with the highest tax rate in the nation. It is another thing if the taxes keep on increasing due to mismanagement of tax revenues.
Chicago is in a financial deficit crisis. The city’s pension debt is in critical condition. The city has a major shortage of police and firefighters. With the new budget allocated to pay for new police officers and firefighters, most of the money is going to cover the pension shortage.
The city needs more police officers to catch up with retiring police officers and the growing crime rate. Chicago still ranks as the murder capital in the Nation. The city is one of the most beautiful cities in the world.
Many benefits of living in the Second City such as public transportation, the best ethnic restaurants, major universities, the downtown business district, and enjoying the world’s most beautiful downtown.
Living in the city is not cheap.
How Much Does it Cost Living in Chicago?
According to Massimo Ressa of Gustan Cho Associates, he said the following:
Chicagoans pay a combined state and local sales tax rate of 10.25%. The city has held this dishonor since the Cook County Boardd passed a sales tax hike in 2016.
Two other major cities in the U.S. share the same rankings as the Nation’s top taxed state. California’s cities Long Beach and Glendale, California share the top spot with Chicago. The report examined cities with over 200,000 people.
Chicago Ranks as Highest Taxed City and Breakdown
Chicago Taxpayers pay the following:
- City taxes of 1.25%
- Cook County taxes of 1.75%
- Transit authority 1%
- Illinois state taxes of 6.25%
- Total sales tax rate of 10.25%
The above taxes can affect a taxpayer’s disposable income. Property taxes in Chicago are higher than outside city limits.
Chicagoans are Going Outside City Limits to Avoid High Taxes
Price-conscious Chicagoans will go outside city limits to shop and/or shop online.
Chicago is in Cook County. Many Chicagoans will cross the city border to a neighboring city to purchase fuel, food, and shop. Beginning January 1st, 2020, online shoppers will need to start paying Illinois state sales tax. All of these taxes, including property taxes, add up. Chicagoans pay the most taxes out of any city taxpayer in Illinois.
Dale Elenteny, a senior mortgage banker at Gustan Cho Associates said the following:
As of 2015, Chicagoans paid three times more in local taxes and fees than Naperville residents, twice as much as those in Rockford and nearly 20% more than residents of Evanston.
Itemized Taxes Charged In Chicago Versus Outside The City
Look at the chart below. It is an analysis of two dozen types of taxes such as cellphones, cigarettes, ridesharing. Data show the city ranked at the top on 10 out of 24 taxes:
Chicagoans get a double whammy. Not only is Chicago highly taxing its taxpayers, but the state of Illinois is doubling down. Illinois has the highest tax rate in the United States.
The Exodus of Illinois Taxpayers to Lower Taxed States
Illinois has the highest tax rate in the nation. Illinois also has the second-highest property tax rate in the country. Just recently, the newly elected Illinois Governor, J.B. Pritzker, has approved 20 new taxes to Illinois taxpayers.
This is not counting on raising existing taxes. For example, J.B. Pritzker approved a bill doubling the state’s gas tax. Pritzker is proving to become less and less popular among Illinois taxpayers. He is proposing changing the state’s current flat tax to a progressive tax system.
A new progressive tax system will no doubt cause a massive exodus of high net worth. It will force many high wage earners to other lower-taxed states. To further anger Illinoisans, J.B. Pritzker approved a bill giving state lawmakers a wage increase
More and more Illinoisans are fleeing the state to other lower-taxed states. It is not just individual taxpayers leaving Illinois. There is a mass exodus of businesses leaving the state to other states.
For example, Chicago-based Midland Metals Products recently relocated to neighboring Indiana. This was due to lower taxes and the cost of doing business. This cost Chicago 150 jobs.
More companies are leaving Illinois to other states like Indiana, Kentucky, Tennessee, Alabama, Mississippi, Texas, Georgia, Florida, and dozens of other lower-taxed states.
Reforming City Government
Chicago is a very beautiful city with tons of potential. The U.S. economy is booming. The majority of cities in the nation are raking in billions. Most well-run cities have a healthy reserve fund. This is not the case with Chicago. Chicago Ranks As Highest Taxed City In The Nation due to a few obvious reasons.
The city needs a competent mayor experienced with running a profitable organization. You cannot spend more than what you take in. Every politician in the world wants to provide free everything.
That is not how simple Economics 101 works. Mayor Lori Lightfoot needs to run the city like a government. She needs to privatize as many departments as possible to save costs.
The Mayor needs to cut expenses by consolidating major city departments and divisions. She needs to stop patronage. She needs to run the city in a bi-partisan way. The city has a long reputation for corruption and patronage.
Countless city employees, political appointees, and elected officials have been indicted, convicted, and sent to prison. Four Illinois governors have been convicted and sent to prison for fraud, bribery, and other wrongdoing. The current newly elected Illinois governor, J.B. Pritzker, is currently under federal criminal investigation for property tax appeals fraud.
Many city, county, and state politicians are currently under investigation. They are either under indictment, have been arrested, and/or in court for wrongdoing. Both the city of Chicago and the state of Illinois need reform. Get rid of corruption. Elect competent politicians for state, county, and city offices.
Fix the fiscal irresponsibility that has been going on for decades. Fix the pension system. Do something to attract businesses, corporations, and residents. Being ranked as the highest taxed city and state in the Nation will not attract new businesses. Or individual taxpayers. With competent experienced humble politicians, Chicago and Illinois can be a great city and state again.