As a kid, I would frequently get in trouble for mischievous acts committed not by me, but by my younger brother. Such is life when you’re the older sibling, and I’ve been repeatedly witnessing this mechanism in other families, to this day. Surprisingly, this pattern of punishing the wrong target group at the wrong time is alive and well in politics (supposedly the arena of grownups) as well, as evidenced by the grand master plan of subsidizing the CTA pension fund with higher real estate transfer taxes. The Tribune reported about this today (may need to register).

Let’s recap what the plan is all about. Save the CTA (really, the CTA pension plan) at the expense of Chicago home buyers. Under this plan, the real estate transfer tax would increase from $7.50 per $1000 of purchase price to $10.50 per $1000 of purchase price. Never mind that this tax increase won’t put another train on the tracks, nor another bus on Chicago’s streets.

Oh, and the timing of this “deal” is the icing on the cake. Not only is it more challenging to obtain financing for the purchase of a home these days, but let’s make it even more expensive for buyers. So for example, on a $400,000 home purchase, Chicago’s way of officially welcoming you to the city used to be a $3,000 transfer stamp bill. Now you will pay $4,200 for the same purchase price. Smile and say hello to your aldermen next time your paths cross theirs.

Update: The IL General Assembly approved the transit bailout plan, and now the ball is in the court of Chicago Aldermen. I emailed John D’Amico and Ira Silverstein a few days ago, asking them to not go along with the pension bailout plan, and Mr. D’Amico at least emailed me back, explaining the reasons why he had to. Nota bene: Mr. Silverstein didn’t even bother responding, but I’m already used to that.

On a similar note, it seems to be fashionable these days to remedy shortfalls in pension funds with the increase of real estate transfer taxes, as outlined here.

Update: City Council boosts real estate transfer tax
More comments on the day after: Tax hike burdens buyers
Watch hizzoner ridicule the 6 City Council “defectors” that voted “No” to the transfer tax increase (hat tip yochicago):

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