David Giuliani: Other taxpayers pick up slack
A week ago, I reported about property tax bills in Kankakee County’s towns.
In an interview, Kankakee Alderman Chris Curtis told me that a lot of people don’t pay any property taxes because of tax breaks, shifting the burden to others.
This angered at least one reader, who expressed her frustration on the Daily Journal’s Facebook page.
“I wish I wouldn’t have read this article,” the Kankakee woman wrote. “I had no idea that some homeowners in Kankakee don’t have to pay any property tax because the value of their homes is so low. It’s ridiculous that we have gotten to that point. Meanwhile, those of us that do pay are picking up the slack.”
For the most part, homeowners who pay no property taxes are probably really poor and would have paid little even without the exemptions.
If you live in the house you own, you get a $6,000 homestead exemption. So you can deduct that amount from your home’s taxable value, which is one-third of the assessed market value.
So if your house is worth $75,000, then the taxable value is $25,000. If you get the $6,000 homestead exemption, then you will be taxed on $19,000. Exemptions for those 65 and older and those who are disabled are $5,000 and $2,000, respectively.
If you are a disabled senior who lives in your own house, you would get exemptions totaling $13,000. Let’s say that amount equals your home’s taxable value, zeroing out your property taxes. Multiplying your home’s taxable value of $13,000 by three would result in a market value of $39,000. That’s far from a pricey home — in fact, it’s less than half of Kankakee’s median home value, which is $88,500.
Even if you got just the standard homestead exemption, your taxes for a $39,000 home would total $1,249 in Kankakee.
The property tax system also includes an exemption for disabled veterans and offers a freeze on a property’s taxable value for seniors as long as their household income stays under $65,000.
Whenever someone takes an exemption, others, as our reader points out, pick up the slack. Without these exemptions, the state’s property tax system would be completely regressive. A regressive system is one that takes a greater percentage of a poor person’s income than a rich person’s. And, for the most part, that’s exactly what property taxes do.
Outside of the few exemptions, property taxes hit the poor more than the rich. That’s not an opinion; that’s a fact.