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183FW: [WorldTransport] About transport impacts over urban land

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  • Wetzel Dave
    Sep 4, 2003
    • 0 Attachment
      ----- Original Message -----

      From: Wetzel Dave <mailto:Davewetzel@...>
      To: 'Shaw, John' <mailto:john.shaw@...>
      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:CenterForTheStudyOfEconomics@...]
      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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