Chicago Voters Have a Chance to Deny Progressive Politicians a New Slush Fund

M ayor Brandon Johnson wants Chicago to be the latest city to increase the real-estate-transfer tax. This is what’s at stake on Chicago’s March 19 primary ballot.

Dubbing it the “mansion tax,” Johnson positioned the tax-hike referendum, “Bring Chicago Home,” as the centerpiece of his progressive agenda. He claimed that the proposal — which would increase the transfer tax on the purchase of any property valued over $1 million — would address homelessness in the city. But the “mansion tax” moniker is just a marketing ploy. Rather than soak the rich, the tax would drench businesses and fill a slush-fund reservoir for Johnson and his supporters.

Based on how similar tax hikes have played out in cities around the nation, Chicago voters would be wise to thwart Johnson’s failed, unpopular agenda once and for all.

Take Los Angeles, where Johnson recently spent $8,000 on a weekend trip. Given that L.A. is the latest city to increase the real-estate-transfer tax, Johnson ought to have been there to hear firsthand about the disastrous real-estate market the policy has brought on. Much of what he actually did, other than attend the Grammys and an arts fundraiser, is unclear. Johnson’s time in sunny L.A. should’ve made it clear to him, principally, that Chicago doesn’t have sprawling acres and multimillion-dollar mega mansions; it has townhouses, high-rise apartment buildings, and mixed-use lots.

Chicago’s problem: Commercial-property sales account for a disproportionate number of all real-estate transactions over $1 million — at a rate of nine to one. This means that the city’s mom-and-pop shops, restaurants, bars, and boutiques would be hit the hardest and most frequently by the proposed tax hike. Among residential properties, multifamily units are the most likely to get taxed. And what would developers, owners, and landlords do if they’re faced with a higher price tag on their new purchases? Pass the cost on to consumers and renters.

Chicago already overtaxes businesses. That, paired with out-of-control crime, has residents and businesses fleeing. Chicago has recently seen the departure of companies such Boeing, Caterpillar, Citadel, TTX, and Tyson Foods. Chicago Mercantile Exchange issued a memo to city leaders warning against raising taxes. Johnson’s response is to propose yet another tax increase.

Johnson claims his tax hike can bring in $100 million.

But what happened in L.A.? High-end-property sales plummeted, and the tax failed to meet expected revenue. That’s the problem with taxation in general: Revenue estimates rarely pan out. Chicago’s new Bally’s Casino, for example, brought in less than a quarter of its projected tax revenue for 2023. There’s no guarantee that the estimated level of real-estate-tax money will come in, especially when relying on something as unstable as Chicago’s real-estate market.

Johnson’s progressive utopia isn’t a reality in the current market, and his takedown of businesses is going to destroy Chicago.

Here’s the kicker — Johnson’s plan to end homelessness in Chicago doesn’t exist. “Bring Chicago Home” offers no guidance about what to do with the anticipated new tax revenue, so there’s no guarantee that the money would directly fund efforts to ameliorate Chicago’s homelessness problem. The mayor could use it for any initiative so long as it loosely relates to “homelessness,” such as, say, subsidized rental assistance for migrants, funding for third-party vendors at homeless shelters, or even guaranteed-income programs. In leaked contract demands, the Chicago Teachers Union — Johnson’s biggest political donor and former employer — proposed using new real-estate-tax revenue to subsidize housing for teachers . . . who are not homeless.

Johnson has been criticized for his lack of transparency and his administration’s habit of ignoring Freedom of Information Act requests. Can the city really trust him to invest in solving “homelessness” when his CTU backers are already making plans about how to spend more of Chicagoans tax dollars?

The real-estate-transfer-tax hike could be the next slush fund for Chicago politicians, but don’t think it would stop in Chicago. Young progressives nationwide are buying into this so-called mansion tax, despite its repeated failings. Besides L.A., seven states and 15 other cities and communities such as New York City, Santa Fe, and the District of Columbia have recently passed their own versions of a progressive real-estate-tax hike.

Chicago voters’ best chance to kick Johnson’s unrealistic, losing platform is to reject the tax hike on March 19.