Monday, June 09, 2008

DEATH AND TAXES ARE TWO CONSTANTS IN THE UNIVERSE OF MAN

Put these words upon his tomb, 'Taxes drove me to my doom...' When he's gone, do not relax, It’s time to apply the inheritance tax.

As this anonymous poem suggests, death and taxes are the two constants in the universe of man.

With Illinois and Chicago residents already swimming in taxes, consider the latest revenue generating ideas on the horizon:

• With Illinois’ proposed $60 billion budget about $2 billion out of balance, Gov. Rod Blagojevich asked top legislative leaders in early June to reignite talks on a new spending plan.

• The governor is hoping legislative leaders will revive a $33 billion public works program already passed by the Senate, but blocked in the House. The public works program would be paid for in part by funds raised from leasing most of the Illinois lottery for decades.

• According to the Blagojevich proposal, revenue from expanded land-based casino gambling, more riverboat gambling and slot machines at racetracks also would be tapped.

Meanwhile, Chicago homeowners still are reeling from the largest property tax increase in Windy City history. And, Mayor Richard M. Daley’s $83.4 million property tax increase won’t show up on Chicago real estate tax bills until 2009.

Even Mayor Daley admits property tax reform is needed. Earlier this year he urged creating a panel of experts to recommend overhauling an assessment system that penalizes long-term homeowners when a new neighbor buys a home for an inflated price.

With home prices declining in some city neighborhoods because of the real estate recession and high foreclosure rates, Mayor Daley also demanded the Cook County Assessor James Houlihan begin an “immediate correction” of property assessments in areas hardest hit by the 2006 reassessment.

Chicago’s recession-battered real estate industry is still reeling from a controversial 40-percent increase in the real estate transfer tax which was hiked to $10.50 per $1,000 of sales value from $7.50.

Developers say the higher transfer tax will put a damper on new-home sales in Chicago, where the most affordable new-construction single-family homes are priced at more than $600,000. The transfer tax on this home would run a hefty $6,300, up from $4,500.

The $3 increase satisfies the city’s obligation included in the Mass Transit Funding and Reform legislation approved by the General Assembly. The $3 increase will be used to pay for CTA employee pension and retiree healthcare costs. The transfer tax hike is expected to generate $63 million in 2008 and $84 million in subsequent years to fund CTA pension plans.

Experts studying the subject of excessive taxes should consider the following list of products, services, vehicles, utilities, and activities currently tapped as revenue sources by local, state and federal governments:

• Corporate income tax, federal income tax, federal unemployment tax, state income tax and state unemployment tax, workers compensation tax; inheritance tax; personal property taxes; real estate tax; building permit tax; Medicare tax and Social Security tax.

• Cigarette and liquor taxes; luxury tax, sales tax and school tax; licenses for dogs, fishing, hunting, marriage and food; fuel permits and gasoline taxes.

• For the use of a vehicle, revenue sources include: recreational vehicle tax; license registration tax; vehicle sales tax, watercraft registration tax and road usage tax.

On the use of a telephone alone there are: federal excise taxes, federal universal service fees, federal, state and local surcharges, minimum usage surcharges, recurring and non-recurring charges and state and local taxes, plus telephone usage tax and utility taxes. Whew!