Chicago Mayor Johnson’s real estate tax would apply to 5,142 businesses

Chicago Mayor Johnson’s real estate tax would apply to 5,142 businesses

Chicago Mayor Brandon Johnson and advocates for a hiked real estate transfer tax argue the rich need to pay their fair share, but many local businesses fall in their definition of “rich.”

Chicago Mayor Brandon Johnson wants to raise the tax for buying million-dollar properties, but many of those properties are far from big-dollar ventures: many are mom-and-pop shops.

Bring Chicago Home advocates argue “the rich need to pay their fair share.” They’ve called their plan a “mansion tax,” but the reality is for every $1-million residence that sells, there are nine commercial properties selling, a recent survey showed.

The tax is now 0.75% on all properties. Johnson wants to tax property value in increments, applying three different rates in the hope of raising $100 million for homeless relief.

The trouble is he has no specifics about how the money will help. There is plenty of evidence higher taxes would hurt the job creators who provide the surest way to get Chicagoans off the streets.

While the proposed tax would increase starting at $1 million in value, the rate would decrease slightly to 0.6% for that first $1 million. That means a $1.12 million property would be the first to see a higher transfer tax rate under Johnson’s plan. The portion of value over $1 million would be taxed at 2% and value over $1.5 million gets hit with 3% taxes – four times the current rate.

There are 5,142 commercial properties in Chicago above that $1.12 million threshold, according to Cook County assessor data.

Under Johnson’s plan, they would all see a higher transfer tax based on current property values.

The list includes some of Chicago’s beloved local businesses, such as Pequod’s pizza.

5 businesses “Bring Chicago Home” considers “rich”

  • Pequod’s Pizza: $1,328,904 property ($2,611 hike if sold)
  • Lou Mitchell’s: $1,442,276 property ($4,028 hike if sold)
  • Mr. Beef: $1,507,060 property ($4,908 hike if sold)
  • Waveland Bowl: $2,040,604 ($16,913 hike if sold)
  • The Vic Theater: $1,534,648 ($5,529 hike if sold)

The extra thousands Johnson would take as taxes could go to startup costs for a new business, especially in a city that already burdens businesses with the nation’s second-highest commercial property taxes.

If buying a commercial property is more expensive, fewer people will do it. National pizza chains can afford the higher price tag for new properties, but it could have sunk local businesses such as Pequod’s when they were first trying to get started.

If the goal is to help people escape poverty and homelessness, a first step would be to help small businesses thrive and create more jobs. Nothing cures poverty like a job.

Early voting in Chicago is underway for the March 19 primary, with Johnson’s tax hike plan near the bottom of the ballot. While a Cook County judge ruled the question invalid and unconstitutional, that ruling is being appealed and the question remains on the ballot.

Chicagoans should still vote on the question and let Johnson know what they think of his tax hike.

Click here to check your voter registration information.

Paid for by Vote No on Chicago Real Estate Tax

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