The cycle of taxes

We are continually told that residential real-estate foreclosures are a product of greedy manipulation by bankers and Wall Street. We are also told that if we spend more taxpayers’ earnings on hand outs to low income home owners we can mitigate the effects of these foreclosures.

The following Chicago Tribune article reports the latest residential real estate tax increases in Cook County, Illinois:

http://www.chicagotribune.com/news/local/chi-property-tax-27-oct27,0,3685132.story

The message that this article delivers is the real estate taxes are going up:

• Most Cook County residents are in for another round of sticker shock when new property tax bills arrive in the mail in a few days, with the median increase in many suburbs topping 10 percent and, in a handful, 20 percent.
  
• Median increases in many city neighborhoods will also hit double digits, with some lower income areas seeing the highest percentage spike. The median rise in the West Garfield Park neighborhood will top 46 percent, according to figures provided to the Tribune by Cook County Assessor James Houlihan.
  
• In the city, the median increase in the trendy Lincoln Park neighborhood is a modest 3 percent and in the North Side Lakeview neighborhood it will be even less, 2.1 percent. On the flip side, however, the median increase in the Englewood neighborhood on the South Side nears 25 percent. The median rise in President Obama's Kenwood neighborhood is 9 percent.

For those of you who are not familiar with Chicago neighborhoods you may be surprised to learn that West Garfield Park and Englewood are arguably the 2 poorest neighborhoods in the city. The fact that real estate taxes are rising by 46% and 25% in these 2 areas will inevitably lead to more foreclosures. When these foreclosures occur we will be told they are due to “greedy manipulation by bankers and Wall Street”. The local politicians will be leading the cry for Federal funds to “save our homeowners”. After the Federal funds arrive, those same local politicians will push through more local tax increases.