Are Additional Real Estate Taxes the Answer?

Real Estate Technology with

I read that Chicago is considering a "Mansion Tax" that begins with homes that sell in excess of one million dollars. The theory is that the tax proceeds will help defer the cost to provide housing for the homeless.

Millionaires and billionaires are fleeing Chicago as it is. Additional taxes typically hurt the revenue outlook because the wealthy flee. New York and New Jersey have seen this a lot as has California.

As an example of the Chicago Mansion tax, a home selling for $5 million would see an additional $150,000 in Mansion taxes.  Prices in desirable Chicago neighborhoods are already dropping. Great idea to create downward pressure on already distressed real estate markets!!

Alvin Lee of Ten Years After wrote a song entitled "I'd Love to Change the World". The lyrics include, "tax the rich, feed the poor, 'til there is no, rich no more".  Governments do not understand this concept.  The Mansion Tax can cause wealthy taxpayers to leave and tax revenue DECREASE. This is happening en masse in NY, NJ, CA, IL and other states.  

This also applies to the wealth taxes that some are in love with. However, wealth taxes have failed every time.

I left New Jersey when my state taxes became a burden and my property taxes rose to $27,500/yr.  This was 2008!!!!!! Over $2,000/mo. just in real estate TAXES and I had no children in the school system. Sixty One percent of my tax bill went to the school systems. 

Michael Elliott
Fathom Realty - Burlington Township, NJ
Burlington, New Jersey Residential Sales

More, higher taxes are never the answer.  We both know this but good luck stopping the train.  What part of NJ were you in?   Burlington, NJ here.

Mar 27, 2024 03:35 AM
Paddy Deighan MBA JD PhD

Michael, I grew up in Cherry Hill...not far away!! I am in Haddonfield for Easter!!

Mar 29, 2024 11:52 AM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Good morning Paddy. How about this in lieu of raising real estate taxes. You are a "newcomer" to Chicago. You register for assistance. You are given an assignment to help pick-up rubbish on our streets and expressways. No production no benefits. And I bet fewer "newcomers"  wanting to come here. That or our roads will be pristine. A win-win I think! Enjoy your day. 

Mar 27, 2024 06:12 AM
Paddy Deighan MBA JD PhD

"Newcomer" LOL  your plan is a good one but those in power don't want newcomers to contribute!!! Happy easter!!

Mar 29, 2024 11:53 AM