Property Tax Corruption
If anything approaches “taxation without representation” in contemporary American government, it is property taxation. This is because as a practical matter voters – as property owners – have no say in the amount of property taxation they endure.
Harold Lasswell, a prominent U. of Chicago political science professor, once said that the country is made up of two groups: the political elites and the masses. The exploitation of the masses is now being achieved through property taxation.
Since political elites have, in most counties, complete control over issues of assessments and property taxes, they have the opportunity to exploit this power to achieve their own ends. This continues for the simple reason that the masses can’t stop them. Traditionally, the goals of corruption are to maintain political power and accumulate wealth.
This piece will use the City of Chicago, Cook County, and the state of Illinois as examples of how property taxation results in political corruption.
Chicago is located in the County of Cook. Its treasurer is Maria Pappas, who has been featured on local TV news exposés for forcing taxpayers to finance her lavish lifestyle. For example, she has a chauffeur paid $94,000 a year and paid an office employee $57,000 a year a clean her office. Both are so-called office workers paid for by taxpayers.
She also set up to have three homeowner exemptions on three different pieces of property, something that is against state and county law. She made this “mistake” for eight years until exposed by the IL Better Government Association. In spite of all these faux pas, she did not resign. And Congressman Luis Gutierrez paid only $274 in 1998 for his property taxes when his neighbors paid up to $5,000 for an identical piece of property. Both Luis and his neighbors live in identical townhouses built by the same builder.
In a form of the old-fashioned shakedown, the two most powerful politicians in Illinois, Chicago – Alderman Ed Burke, who happens to be chairman of the City Council’s Finance Committee, and House Majority Leader Michael Madigan – earn millions a year from their law firms. The most lucrative part of their law practice is winning property tax appeals. Their have very high success rates, particularly for big-dollar clients who want to save tremendously on their property taxes.
A growing number of people are losing their homes to fraudulent tax lien procedures. Stories come from all over the country, and the federal government has convicted some county treasurers of conspiring with realtors, lawyers, and judges to rig phony homestead exemption fees, late fees, and penalties. This scheme seems to be growing. Fortunately, since it involves federal investigations and prosecutions, it is largely immune to local political connections. While this is taking place all over the country, the county treasurer of Madison County, Illinois was involved in rigging auctions to purchase homes for tax liens. His friends and campaign contributors were the beneficiaries of a scheme that involved over 2,000 properties.
Another version of property tax power is demonstrated through the special property tax waivers given to corporations who move into cities or states. New York State, for example, is apparently finally admitting that its high taxes can discourage job creation and is using taxpayers' dollars to fund a national TV and radio ad campaign to tell those who move to New York State that they will be relieved of property tax liability for ten years. This may be disconcerting to those who have struggled to keep their businesses open while paying the high taxes of the state. It’s similar to the DREAM Act grants given to illegal immigrants that are not given to legal citizens and lifetime residents of states whose parents paid state property taxes and income taxes all of their lives.
These practices are not unique to Chicago, Cook County, and the State of Illinois. These areas merely provide a good study of the possibilities of corruption. Property taxes are used by the political elites in every way imaginable, and they make it a goal to come up with new avenues of corruption.
These abuses can be found just about anywhere in the U.S., but the Democratic Party has a particular affinity for them. The largest cities are run by Democrats, and they have reigned since 1932, the beginning of FDR’s New Deal programs, in these cities.
This long one-party reign has prompted the second, and more damaging, type of property tax abuse: the use of property taxes to keep Democrats in power. It is more than fair to accuse Democrats of using property taxes to stay in power, since the national teacher unions, SEIU, and AFSCME give the great majority of their campaign money, much of it obtained through property taxes paid for by middle-class homeowners and renters, to the Democratic Party.
Those liberal media types who go into rages over how Halliburton may affect the Republican Party or the Koch brothers may share their personal wealth with politicians running for office seem to turn the other way when the very people they claim to protect, the working classes of the country, are forced to support Democrats through property taxes.
For example, in Cook County, IL, 60% of the property tax bill goes to education. There’s more. Democrats use the property tax system to promote their political agenda as well. Illegal immigrants who move into the city pay much lower property taxes. After all, if they are doing low-paid jobs no one else will do, no one can expect them to be able to afford to live in the city without extensive property tax subsidies. This raises the level of property tax bills for all the legal citizens, white, black, Asian and Hispanic, who are stuck living in the county.
And property taxes finance local elections, state elections, national elections, and policymaking through the shadow party of public sector union employees.
And of course the State of Illinois, which sets up this entire arrangement, now has the lowest credit rating of all fifty states, just one step above junk bond status, with its debt estimated by Moody’s to be $205 billion. This does not include the debts of the County of Cook and the City of Chicago.
It is generally recognized that exploiting others requires a position of domination. Then this position can be used to create the power to take wealth from others. This wealth is used for more political power, cleaning ladies, and personal chauffeurs. And the way this exploitation is accomplished today is largely through property taxes. In fact, one can use the property tax test to prioritize the initiatives of the Democratic Party: anybody who gets a property tax break is part of their up and coming strategy. Anyone who doesn’t pays for those who are members of the party avant-garde.