MICROECONOMICS LESSON: THE EFFECTS OF CHICAGO’S OBAMA-STYLE TAXATION ON PARKING

DISCLAIMER:
I understand that this post is boring, and overly-simplistic…..but so are most Obama supporters…I did not write this for my regulars, but for the bots who visit my site…..
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Because having the highest sales and gas taxes in the country is still not enough to keep our city’s infrastructure, public hospitals, public transportation, public schools, payroll, etc…etc….etc…in check….Chicago is now considering hiking our parking tax up from 27% to 33%…….

So what?…you may ask….

..and, if you ask this, you probably say the same about Barack Obama’s plan to tax individuals, and small businesses, that make over $250k/year….

Well….let’s use this example, of parking taxes, to take a look at the effects of higher taxation, and how the taxation is passed on to the consumer….this is a snippet taken from today’s CBS 2 report (full report here)

Loop Parking May Be Getting More Expensive
City Proposal Would Hike Tax To 33 Percent
CHICAGO (CBS) ― Parking in the Loop is a pricey proposition as it is, but Mayor Richard M. Daley wants to make it even more expensive with a new tax increase.

As CBS 2’s Joanie Lum reports, some Chicagoans are so upset about the idea that they held a protest on Tuesday.

The parking industry says taxes have been raised six times in the past 12 years, and they have no choice but to pass that cost onto the drivers. They said the expenses incurred from the new tax could price some motorists out of parking at all.

As motorists entered the Lake/Wells Self Park Facility, 175 W. Lake St, workers handed out flyers and encouraged them to call their local aldermen and fight the increase. They say Chicago has the second highest parking tax in the country, and with the new proposal it could rise from 27 percent to 33 percent.

The only U.S. city with a higher parking tax is Pittsburgh, where the tax is 45 percent. Before dropping a year ago, the Pittsburgh tax had been 50 percent.
Parking attendants told their customers prices would go up if they did not raise their voices. As it is, the average parking garage rate in Chicago is nearly $300 per month, more if you pay by the day. The tax hike would increase that amount by about $15 per month.

“It’s $30 a day, so that can get pricey pretty quick, especially if they raise it,” said motorist Ron Martin.

Parking companies say prices are out of control.

“A big portion of that right now is between the city and county taxes. People don’t really realize that,” said Jim Doria of InterPark.

Ok….I know…this is a little boring…but I think the point is obvious…

When taxes are raised on a business, the business still needs to make a profit, pay it’s employees, and cover it’s operating costs…..how do they do this?

raise prices, or cut costs (costs typically means people…i.e. jobs)…..

So when prices are raised…things become more expensive…..when jobs are cut…..people have less money….

Bottom line…everything has a multi-dimensional cause and effect relationship….

In this case, while taxing the “rich” and/or businesses sounds great [especially to college kids, and trust-fund hippies (Bill Ayers anyone)]…..people(again, by people-I mean trust fund hippies and college kids) must keep in mind, this taxation will come back to bite them in the ass….