Nickeled and Dimed in Chicago

July 2, 2012

Last week, Chicago Public Schools officials announced that “the district will impose the maximum allowed increase to its property tax levy for the second year in a row.” While this amounts to an increase of just $28 for a $250,000 home, any Chicagoan will tell you that tax hikes have become the norm.

The great 2011 income tax increases of Illinois aside, Chicago also recently increased its tax on taxi cab rides by one dollar per pull, and Cook County increased its taxes on vehicle registrations and non-cigarette tobacco products. The city is now considering an increase in its soft drink tax, which already sits at 3 percent of the sale price. The proposed increase would set the tax at 15 to 35 cents per drink.

The City of Chicago’s list of taxes include:

Chicago Taxes

Amusement Tax

Boat Mooring Tax

Bottled Water Tax

Gas Use Tax

Cigarette Tax

Electricity Infrastructure Maintenance Fee

Electricity Use Tax

Emergency Telephone Systems Surcharge, Landline & Wireless

Employers’ Expense Tax

Flag Pull Charge (Taxicab Use)

Foreign Fire Insurance Tax

Fountain Soft Drink Tax

Ground Transportation Tax

Hotel Accommodations Tax

Liquor Tax

MPEA Airport Departure Tax

Motor Vehicle Lessor Tax

Non-retail Transfer of Motor Vehicles Tax

Occupation Tax (For Natural Gas Distributors)

Parking Tax

Personal Property Lease Transaction Tax

Real Property Transfer Tax

Restaurant Tax

Taxicab Fuel Surcharge

Telecommunications Tax

Tire Fee

Use Tax (For Titled & Non-Titled Personal Property)

Vehicle Fuel Tax

While some of these revenue measures seem rather innocuous (such as the five cent tax per bottle of water sold), some of these provisions result in hefty tax burdens for all income groups. For example, the real property transfer tax on a $300,000 home amounts to a bill of $2,250 for the buyer and $1,350 for the seller. This tax is less-than-transparent, and is often sprung on unsuspecting first-time buyers when they begin shopping mortgages.

Hefty burdens do not end there. One of our recent studies found that Chicago imposes the second-highest tax rate on meals among major U.S. cities, and another found that thanks to a recent Illinois excise tax increase, Chicago has the second-highest cigarette excise tax rate in the country.

More on Illinois here.


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