Progressive Taxation at the Local Level - My Take

I received my mail-in ballot for the primary here in Illinois, which includes some items that are specific to Champaign County.  The County has been operating under deficits for a while and needs a way to generate more revenue and/or to reduce its level of spending.  I'm going to focus on the former here.  Raising revenue for local government is done via taxation.  There seems to be two options for that.  Either increase the sales tax or increase the property tax.  

The sales tax is generally regarded as a regressive tax.  Even people of modest means have to buy groceries and other necessities.  They pay the sales tax when doing so.  The property tax is more progressive.  Its magnitude depends on the assessed value of the home.  Wealthier people tend to have higher valued homes.  So, increasing the property tax tends to put the incidence of the tax onto wealthier people. 

Now, here is an important sidebar.  Wealthier people are more prone to itemize on their Federal income tax returns.  The property tax is one of the itemized deductions one can take.  From 2018-2024 there was a cap of $10,000 imposed on that deduction.  In 2025, the cap was raised to $40,000.  For Champaign County, I would guess that most homes would have assessed value that keeps their property taxes well under the cap.  Readers of this post can find the Federal tax brackets here.  The point is that if Champaign County raises the property tax, the actual burden on homeowners will likely be only a fraction of that, with that fraction determined by what tax bracket the homeowner is in.

Here is another sidebar.  I came of age when Reagan was President and it was commonplace then for voters to be told to vote their pocketbooks.  Were that to happen now, wealthier voters would embrace the sales tax increase, while voters of more modest means would endorse the property tax increase.  What I want to argue here is that wealthier voters need to show some leadership and get beyond voting their pocketbooks.

Taking myself as an example, in my household we are financially comfortable.  A modest increase in the property tax would not impact our quality of life one iota.  Under the current circumstances, it would be best for folks like me to embrace paying more in property taxes.  If enough did that it would show that selfishness doesn't always win at the ballot box.

I truly wish we could send that message in a credible way at the national level.  But for now, we should make a start of it by doing so in Champaign County.