Quote:
Originally Posted by Tom Servo
We have the highest sales tax in the nation. Our property taxes are also extremely high too. Gas here exceeds the national average by over a dollar. And the cost of food (both at the store or at restaurants) here is also much more expensive than than most cities throughout the nation, prices at restaurants here are just crazy at times (and I'm not even talking about those 4 and 5 stars nouveau-rich places).
Living here is very expensive at times. The only thing "cheap" is our bars and alcohol. Rent here is hardly "cheap"... reasonable, sure. Property is fairly reasonable too, which is what separates us from San Francisco, New York, and Boston. But there is nothing cheap about the cost of living in Chicago.
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Sales tax hardly accounts for a massive change in anything amongst the average person. If you were to spend $3000 per year in taxable goods in two different cities, but one of the cities had a sales tax 5% more than the other, the difference you'd pay per year in sales tax in the higher taxed city is just $150. And while that's not nothing, it's not a ton of money. It accounts to a grand total of $12.50 per month, which is equivalent to about 2 sodas from a vending machine consumed per week.
Now let's take the more important tax, which is income tax.
For a minute, pretend you spend $3000 per year ($250 per month) more on your property taxes in one location versus another. Now pretend that in both locations, you make the same amount of money and it's $80,000 per year. One location has a 3.75% income tax while the other has an 8% income tax. The income tax you pay in the 3.75% location is $3000 per year while the income tax you pay in the 8% location is $6400 per year. Combine these together, and even though you're paying $250/month more in property tax in one location, combined with the income tax, you're still saving $400/year by being in the other place with the higher property tax but lower income tax. Even if you take the example above with the sales tax and add that onto here, you'd still be coming out $250/year ahead in the place with a much higher sales and property tax, but a much lower income tax.
Most people react very strongly to one tax without calculating the entire picture. Often times they are really not saving as much money as they think and sometimes they are even losing money in one place versus the other because they took one or two taxes to mean everything. In the end, income tax is the most important thing and in the realm of things, Illinois' rate isn't that bad compared to many other states. If you want to talk about gas, then that's another story in which people don't even look at the whole picture. So again, pretend you pay $1000 per month in Chicago for a place versus $700 per month in a place like Atlanta. Chicago is one of the easiest cities in the country to live without a car in. Add in $100/month for public transit and $50/month for cabs/ubers and your combined transportation + housing costs would be about $1150 per month. Now as far as Atlanta goes, you're going to need a car. If you spent $200/month on gas and $50/month on insurance, you would be up to $950/month counting housing. If you didn't even own your car, you could easily be paying at least $200/month if not up to $350/month. In this case, even on the bottom end, you're now paying the same amount of money to live in Atlanta as Chicago even though your rent was $300/month less in Atlanta.
I don't think anybody is saying Chicago is cheap. It's not CHEAP (though it can be if you know what you're doing). But to say it's top 10 in the world is nowhere even close to reality. I've been to Singapore a few times - there's no way any second of the year that Singapore, even if you don't include property tax/values in the fray, is cheaper than Chicago.
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