What happens when cities do not reform pensions? Or when government unions, refusing to compromise on pensions and retiree health care, insist that the wealthy pick up the tab? Welcome to Chicago, with its $33 billion in unfunded pension liabilities. Chicago Mayor Rahm Emanuel is now proposing gigantic tax increases in a city already heavily burdened with taxes. Mr. Emanuel is looking for an increase of $588 million in property taxes, to be phased in over four years. The revenue from the increase in taxes will do little or nothing to improve city services. Instead the money will fund pensions for firemen and policemen.
As the WSJ notes, “there aren’t enough rich to soak, so now Mr. Emanuel is whacking middle-class homeowners.”