Expanding on a subject covered here nearly six years ago, Tim Novak of the Sun Times writes about assessment deals in Wrigleyville. Actually, not just 32 properties in Wrigleyville, but apparently on 13,984 parcels countywide, each of which reportedly contains commercial use along with at least one, but no more than six, apartments.
Because Cook County taxes residential (and vacant) property at 40% of the rate applicable to commercial property, and because, 17 years ago, the Cook County Board decided to pretend that commercial property containing one to six apartments is residential, taxes on these 32 Wrigley-area properties (and, presumably, on all 13,984 parcels) are only 40% of the amount they would otherwise be. Furthermore, Novak visited some of the properties and found evidence that they don’t contain any apartments at all. Which Assessor Berrios thanked him for reporting.
Novak also visited an auto repair shop across the street from Wrigley, whose owner owes $78,000 in back taxes and claims to fear losing his property. Of course I don’t know the owner’s personal financial situation, but given high land prices in the neighborhood, it seems he could sell his site for a couple million dollars, take the money and buy (or buy land and build) a better facility a mile or two away. Across from Wrigley may have been a good location for car repair in the 1970s, but not so today.
(1) Sun Times needs to sell papers (and attract web traffic) and putting “Wrigley” in the title probably doubles or quadruples the number of people who’d read an article about “tax break.” But the issue is taxes, not commercial baseball.
(2) Once again, let’s be thankful that real estate tax and assessment data is (mostly) accessible to the public. Who knows what kinds of scandals there are on the income tax and sales tax returns filed by the politically-connected property owners, their accountants or attorneys? Unless Wikileaks takes an interest, we’ll never see them.
(3) All this would be solved with a land value tax. Everybody pays the same rate — a big rate — based on the value of their land, exclusive of improvements, and perhaps no other taxes are needed. If there were inequities, the Sun Times — or the Civic Federation — could publish maps making them readily visible.
2 thoughts on “Another outrage that a land value tax would eliminate”
I 100% agree.
My question is, how would you phase it in? Can you refer me to details about the roll out of a land based property tax that doesn’t suddenly throw everything into chaos?
Thanks for your question.
Most Georgists nowadays say a land value tax should be phased in gradually, to minimize “chaos.” After all, it is routine for taxes to change somewhat every year, and people adjust tho they will complain. I don’t know whether you could find discussion of any other approach published during recent decades.
But I agree with Henry George’s view that the shift of all taxes onto land value should ideally be done quickly and completely. The vast majority of people will be better off, due to the abolition of all other taxes. A quick change is simple, and minimizes the chance that the transition would get stopped before it is complete. Of course, politically there would be negligible support for this strategy nowadays. “Disturbing vested interests is truly more perilous than touching one’s own soul.”
– Gu Kang