(More from "The Next City" conference last weekend in Cambridge, sponsored by the Nieman Foundation, the Lincoln Institute of Land Policy and Harvard's Graduate School of Design. I encountered blogus interruptus when my Mac laptop went on strike. I'm doing a series of notebook-dumping posts.)
Continuing the theme of quotable economists: Jeff Chapman, professor of applied public finance of Arizona State, who researches state and local government finance, gave a rundown of what he called "tax myths." Herewith:
1. All states are the same.
2. Tax breaks for economic development are worthwhile. His position is that almost always the companies would locate there anyway and that taxes are a lesser consideration for those corporate decisions.
3. Property taxes are regressive. (A regressive tax disproportionatelys hurt lower-income people. Sales taxes are regressive. The income tax is progressive, as in wealthier people pay proportionately higher rates.) Chapman is a fan of the property tax because it's stable, hard for people to evade, and promotes local government. " ...and it is really unpopular," he concedes.
4. Not taxing e-commerce is good.
5. Housing impact fees are always shifted to the buyer. Most empirical evidence, he said, shows that isn't true. And, he asks, if housing impact fees could be shifted so easily to the buyers, why are the plaintiffs in cases challenging them always the developers?
Wednesday, April 29, 2009
Buyers pay impact fees? Myth, prof says
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27 comments:
"Taxes are a penalty on progress" James Cook
"Taxes are necessary. But the system of discriminatory taxation universally accepted under the misleading name of progessive taxation of income and inheritance is not a mode of taxation. It is rather a mode of disguised expropriation of the successful capitalists and entrepreneurs." Ludwig Von Mises
"The power to tax is the power to destroy" John Marshall
Developers fight impact fees because it hurts their ability to sell homes. Higher the selling cost = harder to sell. Not sure why that is so difficult to understand. And its really the RE agents fighting this, as they are smart enough to understand it hurts their business.
But hey, what tax has the Observer ever been against?
Good one Ghoul, the Observer has always been a strong supporter of the tax and spend crowd.
Funny part...they helped get their King elected president and slowly the newspaper industry continues to slip into the abyss. I suggest by 2020 there will be no Charlotte Observer. Can't wait!!!
In other words, this guy supports every possible tax there is.
Keep up the socialism, Mary. You're getting to be really good at it.
END HIGH TAXATION. ENOUGH IS ENOUGH!!!!TAKE BACK OUR COUNTRY FROM THE STATISTS!!!!
New development NEVER generates enough in property taxes to cover the expense of providing government services and infrastructure for it. That means the rest of us pay taxes to cover the cost of new development that developers benefit from. Impact fees are a way of shifting the burden of providing the services required by new development to those who benefit from it - developers and those who choose to live there.
If you are against increased taxes you should be in FAVOR or impact fees.
Yeah, people who build and buy houses should pay for the infrastructure that they need.
If property taxes are “hard to evade”, how have 28,800 Mecklenburg County property owners managed to avoid paying $26.7 million in taxes on personal and real property for over a year -as evidenced by those ads in this week’s Observer? I live on fixed income and managed to pay my $3,300 share on time, mainly because I live within my means and budget. Yet those whose over-reaching contributed mightily to the current mortgage, banking and housing crises in effect get long-term loans of tax funds at very little interest.
Federal and state income taxes primarily impact employees. Sure, there are many high-buck employees who get a W-2 and therefore can’t reduce their income tax bite. But we have an estimated 80,000 illegal aliens in the Charlotte area who are apparently misclassified as independent contractors, are paid cash wages, and who have fled the tax-reporting coop by the time their Form 1099 arrives in January. And there are a lot of small “businessmen” who take advantage of Subchapter S of the Internal Revenue Code to duck quite a bit of taxes under the guise of contributing to the economy.
We have a lot of loopholes and wiggle-room to close to make taxation more equitable in this country.
As for e-commerce, when are our legislators going to wise up and levy the same sales taxes on web purchases as on goods bought at our struggling retail establishments? If we would tax the arrogant teenagers at Google for stealing news stories without paying for them, maybe our newspapers would still be thriving and providing jobs for many in our community. Where’s the trickle-down effect into our economy from Google, Amazon and others?
"If housing impact fees could be shifted so easily to the buyers, why are the plaintiffs in cases challenging them always the developers?"
Because an impact fee makes a new home uncompetitive with an existing home. How hard is that to understand?
Oh, and property taxes are "hard to evade" unless you're a taxpayer-subsidized "non-profit" in CharMeck.
Bull. New homes have every advantage in sales over existing homes. They have builder-paid loan incentives, all new appliances and systems and they have the rest of us paying for the streets, sewers and schools needed to serve them.
11:18 - So existing homes aren't on streets, don't have appliances, don't send kids to schools, and don't use sewers?
TAXATION IS THEFT.
Existing homes don't require paving new streets or widening existing ones. Existing homes don't require building new schools. Existing homes don't require building new water and sewer lines. Studies consistently show that the cost of providing these services to new residential development greatly exceeds the property tax generated. Who do you think is stuck with the rest of the bill?
Yes of course existing homes have appliances, but they are not brand new. It's the same as comparing a new car to a used car.
New taxes from new homes would pay for infastructure and upkeep if the taxes paid were not wasted on so many welfare schemes and used for what they were originally intended.
Come on people, surely you know by now that developers pay for the roads in the subdivision, the water, sewer and everything else in the development. If an impact tax were charged, they would pay for that too.
All of these costs are passed on to the person who buys the lot and ultimately the home buyer. The main point is, that the city/county don't pay ANYTHING in development costs, the developer does. So, when homes in a new subdivision are lived in, the owners pay the same taxes for services as everyone else who already lives in the area. Wake up people!
These lies are so obvious and self-serving that it is obvious that they were written by someone who works for a residential developer. Ridiculing the truth just because you don't like it donesn't make it any less true. The property taxes generated by new development DO NOT cover the expenses incurred by local government in providing infrastructure to serve it. The shortfall is paid by the rest of us in higher taxes on our existing property.
Boo hoo for the poor developers who have so many expenses that they can't make any money paving over the undeveloped countryside.
Sorry, not ignorant. Just telling the truth. I'm not talking about the streets and sewer pipes in the neighborhoods. I'm talking about the multi-million dollar cost of extending sewer lines to previously undeveloped areas. I'm talking about the multi-million dollar cost of improving two-lane country roads to serve the traffic that wasn't there previously. And I'm talking about the multi-million dollar cost of building schools to serve areas that previously didn't have more than a handful of children.
The developers don't pay for any of that. The property taxes generated by the new houses pay for only a fraction of that. The rest is paid by owners of existing homes in increased taxes and increased water/sewer rates.
Why do you think taxes are so high here? It's sure not because of the quality of city services. It's because developers have our elected officials in their back pockets and have been allowed to slap up cheap houses and pave over the entire county while pocketing huge profits.
Taxes are high everywhere because we elect GREEDY DO GOODERS.
8:54 - Why are taxes so high here?
Take a look at the actual budgets for Charlotte and Mecklenburg. The top line items for Mecklenburg are bad schools and welfare services. BOTH are predominantly spent in the inner city, not the suburbs. The top line items for Charlotte are police and fire, again the money is spent more in the inner city.
Congratulations, ye defenders of suburbia! We are now almost like the formerly great city of Atlanta:
"The bad news [about the Charlotte Metro area]: On top of seeing your financial services engine [banks] stall, your transportation investment policy remains stuck in a roads-mostly mentality. As long as your cities and counties turn half-blind eyes to the fact that your scattering development all over the Piedmont, you're tracking Atlanta's decline almost perfectly." - Curtis Johnson of the Citistates Report in today's Charlotte Observer Viewpoint page.
Yep. The Charlotte "cotton plantation mentality": Spend millions to tear up more farmland and forests and keep moving outward to avoid replenishing and reusing those center cities.
If you are for freedom and liberty you should be against higher taxes.
I am against higher taxes. That's why I am FOR impact fees.
TAXATION IS THEFT.
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