Chicago Mayor Brandon Johnson is pushing for a “mansion tax” on sales of homes over $1 million, while his administration continues to impose higher taxes on households making more than $100,000.
The newly elected mayor, who took over from his disastrous predecessor Lori Lightfoot in May this year, wants to implement a tax increase to combat homelessness in the city.
Allies of Mayor Johnson, 47, have also announced plans to push through a $12 billion plan for the city titled “First We Get the Money.”
The plan, apparently named after a quote from the 1983 film Scarface, aims to build a more “just” Chicago by cutting police funding and introducing new taxes in the city.
Johnson believes that people who own properties worth $1 million in the US’s third-largest city “are rich, and should pay up when they sell those houses.”
Mayor Brandon Johnson delivers remarks during a news conference at City Hall in Chicago on August 2, 2023
This property, just outside the city, is currently for sale for just over $1 million
Property owners who sell their homes for between $1 million and $1.5 million would see tax rates rise from 0.75 percent to 2 percent
The plan, called “Bring Chicago Home,” is a compromise from his previous plan, which would triple the transfer tax rate from 0.75 percent to 2.65 percent.
According to the National ReviewJohnson now proposes a progressive three-tier transfer rate.
This means that sales under $1 million would see the tax reduced from 0.75 percent to 0.6 percent, while property owners selling their homes for between $1 million and $1.5 million would see tax rates. increase from 0.75 percent to 2 percent.
On sales of real estate worth $1.5 million or more, the tax rate would quadruple to three percent of the transfer amount.
A search of real estate sites by DailyMail.com showed it was difficult to find properties of any significant size for more than a million dollars, with the majority being apartments or small townhouses.
According to Midwest Real Estate Data seen by Chicago BusinessLast year, 2,391 homes sold in Chicago for $1 million or more, a decline of 14.5 percent from the previous year.
Zillow also currently reports that the average price of a home in Chicago is $287,709, which is a decrease of 1.2 percent from the past year.
Business owners have expressed disgust at the additional taxes planned by the ex-union organizer, whose upset was achieved this month thanks to the support of figures such as Bernie Sanders
Mayor Lori Lightfoot left office earlier this year after losing the April election – she is pictured here in May
Jack Lavin, president of the Chicagoland Chamber of Commerce, said the Chicago Sun Times: ‘We remain opposed. Chicago would have the second-highest real estate transfer taxes if passed, compared to competing cities.
“This will deter global investors. It will hinder development, union job creation, tax base growth and small business.
‘It comes at a time when vacancy rates are high, available sublease space is high, bankruptcies are happening and the return to the office is still recovering.
“Property taxes are going up. All this increases the burden on businesses.’
The latest tax is just one of many ways the new mayor has proposed generating revenue for the city.
The “First We Get the Money” plan would raise taxes on more than a third of all Chicago households earning more than $100,000.
The National Review reported that $100,000 in Chicago doesn’t go as far as in most other cities.
Chicago currently ranks 58th out of 76 U.S. cities in cost-of-living-adjusted take-home pay starting at an income of $100,000, while Chicagoans take home just $59,505.
A new tax introduced by the new mayor would continue to erode take-home pay.
Nearby cities like St. Louis, Indianapolis, Lexington and Milwaukee all see a $100,000 salary increase.
In addition to rising taxes, Johnson is also grappling with a migrant crisis, with Chicago among a number of northern cities largely run by Democrats and declared “sanctuary cities.”
Jack Lavin, president of the Chicagoland Chamber of Commerce, said he opposed the mayor’s new moves
Some migrants are pictured sitting on the floor of a police station awaiting temporary shelter
Images posted earlier this year by photojournalist Rebecca Brannon showed dozens of migrants sitting on and around mattresses in a Chicago police station.
Brannon reported that many of the migrants had been sleeping and eating on the floors, which had disrupted daily police activities.
After Johnson was elected in May, businesses vowed to leave the windy city because of the extra taxes he promised.
Rising crime had already forced companies such as Boeing and Caterpillar to move their headquarters elsewhere under his predecessor’s administration.
Last September, McDonald’s CEO Chris Kempczinksi said the fast-food giant was facing challenges recruiting workers for its Chicago headquarters.
Tyson Foods announced it would move all of its corporate teams to its headquarters in Springdale, Arkansas.
Johnson also faces a growing migrant crisis, with Chicago among U.S. cities already struggling to provide shelter and other assistance to hundreds arriving from the southern border.
Lori Lightfoot’s tenure has been marked by criticism over her handling of crime in the city, which has risen significantly. The city recorded 800 murders in 2021, the highest number in 25 years.
Lightfoot has also faced controversy over her tense relationship with the press and city unions, with some accusing her of limiting Freedom of Information access to public records.
Lightfoot, the first Black woman and first openly gay person to lead the city, won her first term in 2019 after pledging to end decades of corruption and backroom dealing at City Hall.
But opponents blamed Lightfoot for the increase in crime in US cities during the pandemic and criticized her as a divisive, overly controversial leader.
As crime continued to rise in the final years of her term, Lightfoot was heavily criticized for promoting causes other than public safety, including a citywide karaoke contest and dancing in the streets during a festival.