3 ms·

It is a great city, but the tax rates are outrageous and they're going to get worse. Just look at the funding of the pension plans. Illinois and Chicago have so

It is a great city, but the tax rates are outrageous and they're going to get worse. Just look at the funding of the pension plans. Illinois and Chicago have some of the worst funding ratios. They've promised too much to workers and never set enough aside. There's a reason why companies like Boeing or Citadel are fleeing.

colinmhayes 4y ago
Boeing left because their tax break ended for what it's worth.
- tptacek 4y ago
  Boeing was barely here to begin with. They consistently missed their job targets, despite being allowed to count contractors towards the anemic targets they were meant to hit. Citadel is a body blow, but Boeing? Who cares.
- Kon-Peki 4y ago
  A few years ago the Citadel CEO went through a very public and extremely acrimonious divorce, during which the wife and kids left Chicago for the east coast and refused to come back. So now, he's all alone, and seemingly getting angrier by the day. His politics are increasingly distanced from what people in the area are interested in, etc. Moving to a location where he might see his kids more often might just make him a lot happier and less angry. If so, that's good for him.
closeparen 4y ago
In what way is Chicago’s tax situation worse than SF or NY?
- eschulz 4y ago
  Illinois is generally in the bottom three of states for pensions being underfunded, and Chicago is normally the city with the highest or second highest sales tax in the US. As an Illinois resident I'm concerned about the high percentage of taxes over the next several decades that will go to service debt, and therefore not provide other services. I think this causes issues which scare away established employers as well as entrepreneurs (high crime rates, struggling public schools, etc). This will then drive away young people who are looking for good jobs, and therefore Illinois misses out on the taxes those people would pay over their careers and thus the situation spirals down further. https://taxfoundation.org/state-pension-funding/ https://taxfoundation.org/state-pension-funding/ https://www.taxjar.com/blog/cities-and-states-have-the-highest-sales-tax-rates https://www.taxjar.com/blog/cities-and-states-have-the-highe...
curiousllama 4y ago
This is a fair point. Long term tax issues could def be a factor. Even beyond the abstract potential bankruptcy: who wants to buy a house when 90-110% of appreciation will be eaten by the inevitable tax increases?
tptacek 4y ago
The tax situation is not great, but for tech workers, it ultimately just means that Chicago is not as advantaged over NYC and SFBA as it could be; the cost of living here is so much lower that it's hard for me to think of a scenario where you wouldn't come out substantially ahead. My kid brother is buying a starter home, in a relatively (obnoxiously) expensive part of Chicagoland, and to get the same house within an hour's drive of San Francisco he'd be looking at 4-5x the outlay. The property tax situation does mean that Chicago houses aren't mortal-lock speculative investments the way SFBA houses are, so there's that to contend with.

colinmhayes 4y ago

Boeing left because their tax break ended for what it's worth.

tptacek 4y ago
Boeing was barely here to begin with. They consistently missed their job targets, despite being allowed to count contractors towards the anemic targets they were meant to hit. Citadel is a body blow, but Boeing? Who cares.
Kon-Peki 4y ago
A few years ago the Citadel CEO went through a very public and extremely acrimonious divorce, during which the wife and kids left Chicago for the east coast and refused to come back. So now, he's all alone, and seemingly getting angrier by the day. His politics are increasingly distanced from what people in the area are interested in, etc. Moving to a location where he might see his kids more often might just make him a lot happier and less angry. If so, that's good for him.

closeparen 4y ago

In what way is Chicago’s tax situation worse than SF or NY?

eschulz 4y ago
Illinois is generally in the bottom three of states for pensions being underfunded, and Chicago is normally the city with the highest or second highest sales tax in the US. As an Illinois resident I'm concerned about the high percentage of taxes over the next several decades that will go to service debt, and therefore not provide other services. I think this causes issues which scare away established employers as well as entrepreneurs (high crime rates, struggling public schools, etc). This will then drive away young people who are looking for good jobs, and therefore Illinois misses out on the taxes those people would pay over their careers and thus the situation spirals down further. https://taxfoundation.org/state-pension-funding/ https://taxfoundation.org/state-pension-funding/ https://www.taxjar.com/blog/cities-and-states-have-the-highest-sales-tax-rates https://www.taxjar.com/blog/cities-and-states-have-the-highe...

curiousllama 4y ago

This is a fair point. Long term tax issues could def be a factor. Even beyond the abstract potential bankruptcy: who wants to buy a house when 90-110% of appreciation will be eaten by the inevitable tax increases?

tptacek 4y ago

The tax situation is not great, but for tech workers, it ultimately just means that Chicago is not as advantaged over NYC and SFBA as it could be; the cost of living here is so much lower that it's hard for me to think of a scenario where you wouldn't come out substantially ahead. My kid brother is buying a starter home, in a relatively (obnoxiously) expensive part of Chicagoland, and to get the same house within an hour's drive of San Francisco he'd be looking at 4-5x the outlay. The property tax situation does mean that Chicago houses aren't mortal-lock speculative investments the way SFBA houses are, so there's that to contend with.