If you own a very modest house worth $35,000, you could pay about $1,000 in property taxes or about $2,000 in property taxes, but is it fair to pay twice as much just because you live a few miles away? Is it fair to pay more when your community has less to begin with?
That property tax example is the difference between having that $35,000 house in East St. Louis rather than in O’Fallon. The modest home in O’Fallon pays half as much.
Of course, finding a $35,000 house in O’Fallon is difficult. The median home value there is more like $185,000. More property value means more folks to share the pain. The obverse is why East St. Louis property tax bills are so high, which hampers new housing development and is a disincentive for folks to move there or improve what they have.
Property taxes are one of the oldest forms of taxation and are likely the most pervasive, generating about $472 billion nationwide. Yet in Illinois we pay more in property taxes than anywhere else.
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Illinois’ median property tax rate is 2.67 percent, or about $1,000 on a $35,000 house. That is double the national median.
So our O’Fallon house example is in line with the rest of Illinois. But our East St. Louis example is four times the national median.
How fair is any of that? And who does the tax injustice hit the hardest?
Our poor. Our students who typically get two-thirds of our property taxes. Our elderly being taxed out of the homes they own.
There has to be a better way.