----- Original Message ----- 

From: Wetzel Dave <mailto:[log in to unmask]>  
To: 'Shaw, John' <mailto:[log in to unmask]>  
Sent: Friday, August 29, 2003 3:01 PM
Subject: RE: [WorldTransport] About transport impacts over urban land

John
Many thanks for these thoughts.
I don't have any direct experience of the USA tax system so I shall ask some
friends across the pond if they can respond to your specific points.
You might also consider looking at
http://www.philadelphiacontroller.org/pr031203.htm
<http://www.philadelphiacontroller.org/pr031203.htm> 

Best wishes

Dave

Dave Wetzel
Vice-Chair
Tra 
 
From: Joshua Vincent [mailto:[log in to unmask]] 
Sent: 02 September 2003 13:50
To: 'Shaw, John'; Wetzel Dave
Subject: Re: [WorldTransport] About transport impacts over urban land


As a pond-jumper in the US, I'd like to take a crack at some of these
issues.  I'd like to inform Mr. Shaw that our Center has been around since
1926 advising municipal governments on how to avoid the pitfalls of sales
and income taxes, which are now acknowledged to be economy-killers (see
Philadelphia Controller's web page).
 
The trend away form property taxes over the past 40 years did indeed take
place.  That process is slowing as disasters such as Prop 13 become
apparent.  The problem as Mr. Shaw knows, is that in the US two of biggest,
loudest and reliable blocs of voters are the elderly and farmers.
Ironically, in US city such as Philly, high income, business and sales taxes
have made it near impossible for middle and working class elderly to sell
their homes or even pass them on to their children: the kiddies flee to
low-tax jurisdictions (such as New Jersey with - ironically - very high
property taxes).  
 
The elderly - and farmers - are also eligible for some very sweet deals on
property taxes in any case.  Senior citizen abatements and "clean and green"
preferential assessment for farmers have skewed tax structures mightily; in
my home state of Pennsylvania many township and other rural jurisdictions
have had serious holes blown in their budgets thanks to these farmland
exemptions (which are called farmer retirement plans around here).  As Mr.
Shaw points out, farmers are too coddled, the time should come that their
influence is reduced.
 
There is just too much proof that the rush to tax the working class and the
poor in the end does grave, corrosive damage to urban centers: Philadelphia,
Bridgeport, Newark and Detroit are all stellar examples of a high income
tax.  Alabama and the other Southern states are exemplars of the
regressivity of sales taxes on the poor.
 
I'll leave with a quote from Jeremy Nowak, who is known as a "big dog" in
policy circles all over the US.  Good luck you transit people, you'll need
it.

The Brookings Review

Summer 2000 Vol. 18 No. 3
Pages 22-26 
© 2000 The Brookings Institution
All Rights Reserved. 

 


Nothing left to Lose
Only Radical Strategies Can Help America's Most Distressed Cities 

by Edward W. Hill and Jeremy Nowak

 "...cities should abolish all business taxes that inhibit the location of
startup firms or discourage investment in productivity-enhancing equipment
or practices, including all forms of gross receipts or turnover and net
profits taxes. Cities should also replace the business property tax with a
tax on the market value of land, coupling the land tax with the broader use
of business improvement districts or tax increment finance districts to pay
for major infrastructure investments. Land taxes, which may initially be
extraordinarily low, even zero, in some especially distressed neighborhoods,
have several advantages over property taxes in keeping a city's economy
competitive. They discourage speculative land banking. They encourage
businesses to place as much capital on property as is economically
justifiable because non-land forms of real property are not taxed. They
strongly encourage city government practices that preserve the value of
land. And, finally, they are a powerful incentive to maintain properties. 
Local personal taxes commonly take three forms: sales taxes, wage or income
taxes, and property taxes, the latter being the most common. A residential
property tax has two components-a land tax and a tax on the value of the
structure. The land component of the residential property tax should be
assessed on an equal basis with the business land tax, again providing
incentives to develop in neighborhoods with low land values, as well as
preventing speculative land banking." 
 



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