Mike Kole has a good piece up over at Kole Hard Facts of Life on jobs, taxes, and declining population. Be sure to check out the comments.
One thing that I realized while reading that piece was that I have an assumption about what would happen in communities where we drop taxes to skeletal levels. And that assumption is a lot different than what I think I see from Mike and certainly from other libertarians. I don’t have a lot of proof that my assumptions are right. I suspect that the libertarians do not, either. And there are always other factors at work, so I’m not certain we’ll ever get a properly controlled experiment.
My ideal economic world is a place where those who work hard and/or cleverly will prosper, where those who don’t work hard and/or work stupidly will suffer, and where the vast middle who work reasonably hard do reasonably well. In this desire, I believe I’m aligned with most of my libertarian friends and many others.
The difference is in opinions to the most feasible path to that place. I think libertarians, by and large, believe that if you lower taxes and limit regulation enough, that economic world will pretty much materialize. With the resulting solid base of industrious middle class citizens, communities will thrive.
Meanwhile, I guess I have more of a dystopian view that if you lower taxes and/or regulation much from current levels, you’ll end up in an economic world more like the Gilded Age or Mexico where a tiny few will amass wealth and have sufficient leverage to ensure that the vast majority work extremely hard just to survive and add to the vast wealth of those few who have the leverage and resources. These subsistence level citizens will not have the time or the money to tend to their communities which will fall into squalor and disrepair.
I would love to find out that my fears are misplaced and their view is correct.
…or end up like Colorado Springs, CO…high unemployment and no city services…
For some reason, and just call it a hunch, I don’t think that a hike in the baseline tax rate in Colorado Springs would be a boon to their local employment numbers.
Thanks for the spotlight, Doug! I appreciate it.
For my money, I would take marginally lower tax rates and be happy. Sure, feel free to give me an 80% cut if you like, but the jesture of cutting would go a long way towards keeping some employers and residents.
If you want to soak the rich, be sure they stick around for the sopping. If the tax policy urges them to leave, you’ll have high unemployment *and* many services unfunded.
The one thing that always occurs to me is that if stopping sprawl is a genuine concern, stop creating policy that informs people that their best bet for staying in a region but leaving immediate problems is to flee to the suburbs. There’s really nothing magical about suburbs at their time of development other than the relative absence of government. For some reasons, many people of means are perfectly willing to leave a well-regulated, nicely taxed area in favor of a place without services, or the capacity to inspect every new restaurant properly. If we are willing to observe the reasons the run this extreme risk, we might be able to prevent sprawl by making cities places people want to live. I’m not merely talking the difference between .75 acre lots and 4-story apartment buildings, because you can have either in a suburb or a city.
Recently Sheila Kennedy had a group from the Netherlands come to her Media & Policy course to give a presentation they had created about life in the Netherlands and, by the end, I was more than ready to pack up and move. Just the thought of living in a country where the common good is valued as highly as it is there seems so mythical and magical when compared to life in the U.S. -especially considering the intense political discord that currently exists within the country.
They brought up an excellent point about a very likely root of the different perceptions of taxation between our contries- Over there there has been a lengthy history of kings and lords and land owners who were owed a percentage of what those below them earned and, in turn, those people came to have certain expectations and demands of those who were in charge of running things. They don’t mind giving over a percentage of their wages because, in return, the government will provide certain amenities for them. Here we’ve never had that sort of history so the different experience of the United States has created a unique perspective on taxation that doesn’t exist in Europe.
To be blunt, in addition to lacking much government, suburbs also lack a lot of poor people. They are also usually green fields which are cheaper than brown fields because you don’t have to deal with legacy costs of delayed maintenance on buildings and whatnot.
The thing is, suburbanites are “stealth socialists”. They want to do whatever they want, but they want society to pay for the bulk of the privelege.
Sure, the initial costs of subdivision utilities and infrastructure are borne (mainly) by the homeowners, but the long-term maintenance costs are not. And, they whine about it.
Really, VG? How about some examples? Because I can give examples of it going the other way, such as schools. No doubt at all that Hamilton County is a donor county, sending a lot of money to both urban and rural districts.
@Melissa- I’ve posted this story here before, but it’s a goodie, and Doug invoked my name to start the thread, so I’m hardly hijacking :-)
I visited Denmark a few years ago, to meet my wife’s relatives there. It was soon discovered that I was running for office, as had one of her great uncles. Before long, talk got to health care, and why the US didn’t have unversal care as the Danes have, along with a generally cradle-to-grave system.
The thing that fascinated me was their take on taxes, the highest in the world at 79%. They don’t mind at all. The prevaling attitude seemed to be that for the Danes, there are times in life when one is on the receiving end of benefits, and there are times that they are on the providing end, and it all balances out, and they are happy. The education and pension are prime ‘taking’ times, the prime earning years are the ‘providing’ years, generally.
I am quite sure that has to do with their traditions. The Danes are a constitutional monarchy, with a tradition that includes the sort of expectations you allude to with the Dutch.
The one spot in the armor that was emerging when I visited (2004) was the strain immigrants were putting on the system- not financially, but in terms of expectations. The average Dane seems to honor and respect the tradition of providing at the appropriate time in life. The immigrants were coming not for a chance to respect the tradition and participate, but merely because they learned that if one stands on Danish soil, citizen or not, one is entitled to universal health care, free housing, education, and food stipends. There was coming to be racial tension, because immigrants from Africa and Asia could easily enough be distinguished from the average Dane. This was a source of cognitive dissonance to those I spoke with about it directly. They were at once embarassed of the racism, but were angered at the violation of their unspoken social contract.
So, I agree that tradition has much to do with the outlook. Indeed, one thing we have to a great extent in American tradition is the immigrant background- one of having left a home where opportunity was seen to be not as great, for a new place of greater opportunity. The phrase ‘you vote with your feet’ is pretty uniquely American. I think city governments lose sight of this, and is applicable to urban cities as well as suburban.
OK Mike, I’ll explain.
Infrastructure and maintenance. Sure, suburb dwellers pay a share of these costs, but do not bear the total cost, not even (or especially) over time. I remember a time when county roads were mainly gravel in most of Indiana. Paving those was subsidized. Subsidies have faded away, and I hear that Hamilton County, for one, is considering letting those roads go back to gravel. State roads and the Interstates that make the commuting easier and safer? Got a copy of a bill for that? Once again, suburb dwellers are depending upon societal largesse to maintain their lifestyle choices.
Utilities are a little different, yet you never have borne the entire cost for the broad range of services that help keep your little corner of Eden pristine. Electricity, telephone, sanitary sewer, storm sewer, water, cable TV, natural gas. You only paid for the portion inside your edition. Where do you think the money comes for the rest of the structures/equipment required to tie your far-flung nest to the power plant or water treatment plant? Everybody else served by those utilities has to help pay for your penchance to live in places better suited for agriculture. For most people, if they had to bear the total cost for their preference to live out with the coyotes, they could never afford it.
So, suburbanites expect government to intervene socially to assist them in living where and how they themselves prefer to live. It’s kind of an under-handed welfare system wherein one does not need to accept something like concrete like food stamps, yet where one still expects to be unburdened of costs concomitant to one’s lifestyle. That’s why I call it “stealth socialism”.
I’m sure I’ve asked this before, but what allegiance am I supposed to owe to the Hamilton county line that makes “sending money to urban and rural schools” an affront to Freedom? However superficially homogeneous, it’s not the Sudetenland or Basque country. In fact, it’s basically a triad of white flight towns which have busied themselves, per their unfettered devotion to free enterprise, in annexing all the unincorporated areas of the county so they can jack up water rates.
Of course, if I remember my public school math, we can adjust by subtracting 19th Century Plating Decisions from both sides of the equation, and we wind up with “the wealthiest Hoosiers are net donors to state schools”. So are the childless and the celibate, but they don’t tend to congregate so much.
Sheesh, Mike; I can drive a mile up Binford Blvd. every morning and watch thousands of gas wasters crawl onto “my” streets, the ones I pay the Marion county wheel tax to provide, from what was productive farmland before the government built the interstate and the public provided utilities. Or I can watch ’em on weekends heading in for Colts or Pacers games–okay, not Pacers–they at least had the “option” to help pay for. I didn’t. And I’m all for building a wall at the county line but, y’know, that’s just a personal quirk; I haven’t tried to pass it off as philosophy.
Finally, it’s interesting to note that this “Tradition” owes a lot of its supposed preeminence to the Pinkertons, the US military, and Henry Ford’s private goon squad, and to one of our two major political parties being essentially a mouthpiece for Big Capital. Or that what the average voter can expect to receive for his Freedom is the opportunity to win the Lotto and a ten-year Boom and Bust cycle that deprives him of much of his wealth.
If you call it ‘stealth socialism’, I’ll call it ‘giving away the store’, if that’s what it is. In such a case, who is responsible? The person who attaches to the network and pays the bill given, or, the entity that doesn’t charge for the alleged full freight? Should I write a check out of guilt?
And, if it is a burden on the taxpayers of Marion County to accept people crossing through (what about all those out-of-state trucks on I-65, I-465, I-70, & I-74!), well then, get on the stick and collect that tax! No need for a wall, just put up a toll booth at the line or equip every vehicle with a transponder.
If you’re county government is leaving money on the table, and apparently gobs of it, hold their feet to the fire.
Oh, and VG, you are way wrong about the roads in HC. Sit down with one of the County Commissioners some time, especially Dillinger or Holt, for some insights on that, as I have done. Every county gets federal dollars for some roads, but most of those county roads that were converted from dirt or gravel to asphalt were done with bonds.
Culpability rests in those who choose to occupy housing willy-nilly wherever they please. County governments are just enablers. Why? Think of all the salaries/benefits/perks which can be gleaned from tax monies. The more roads, drains, waste and grand public edifices a county generates, the more jobs for those whom government employment is the golden horn of plenty.
And, what are public bonds, but yet another shifting of a particular burden from the few to the many?
And I’m wrong about which part of the HC roads? The original funding mechanism, or the urge to let most go back to gravel?
“Culpability rests in those who choose to occupy housing willy-nilly wherever they please.”
Yeah! Damn that freedom stuff!
Is there an example of a large-scale urbanized and modern libertarian society that has proven sustainable, stable and prosperous? I can’t think of one.
Here’s a suggestion.
Live wherever you please. But, pay for it yourself. All of it.
Schooling, fresh water, power, communications, transport, sanitary, storm drainage, food, and so forth. I’d even let you out of paying government taxes to do so.
But, you can’t impose your “freedom” on anybody else’s ‘”freedom”, which means that since the water table is a broader resource than you can likely afford, you can’t “share” your sewers into it. You can’t drive on anybody else’s land to go anywhere, and your water “rights” are limited by your freedom-loving neighbors, who correctly want their fair share. Your NIMBY neighbors don’t want any power lines getting in the way of their view, their trees, or their fences, so you have to create your own energy (which had better not be sharing its pollutants with your neighbors’ air or ground water).
And then, there’s the “food” issue. No chemicals and no large animals (or large numbers of animals) that might impact your neighbors.
There are valid reasons why dense societies must have provision of services. You don’t like the amounts taken in taxes, and that’s a valid argument. But, let’s just refrain from going overboard on the whole personal freedom thingy. That may still work for a few scattered places and people, but generally that old homesteading time is over. Libertarians just seem to want to hang on to the idea of it (while taking full advantage of all the infrastructure that society has provided them). And it diminishes your political position.
@VG- So, if I understand you here, in your estimation, in order for a suburbanite to be a good citizen, one has to complain on arrival that they aren’t paying their fair share, and that someone should please, kindly step right up and forward the higher fees to make it so? Um, yeah. Ok. You want to blame the suburbanite for paying the bill that is produced, and somehow not blame they who give the store away? And you’re the realist? And I’m the utopian? Whooooo.
The whole point of my original post was the realism of cutting taxes if one really wants to stem population and job losses. What was unsaid and implied was the utopian, ideological, unsustainable approach is to be endlessly committed to maintaining government empire in the face of rejection by citizens, as evidenced by their moving away.
Get that. Libertarians are the realists in this case. The unsustainable ideological utopian model is the mixed economy that grows government during any economic rise, and expects never to need to retract when receipts fall in a downturn.
Libertarians may be utopians in things like drug policy, but in this basic economics, we’re the hard-boiled realists.