To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Thursday, July 24, 2008

There are Lots of Factors Contributing to the Stench, But High Property Taxes is Certainly One

Stephen Walters and Steve Hanke in the WSJ on Baltimore:
If you've seen HBO's "The Wire," you know why those of us who live in Baltimore are often asked whether our city really is the hellhole it is portrayed to be on TV.

Our answer is, well, yes. Baltimore deserves the Third-World profile it has developed because it has expanses of crumbling, crime-riddled neighborhoods populated by low-income renters, an absent middle class, and just a few enclaves of high-income gentry near the Inner Harbor or in suburbs. [...]

How did this happen?

Most people think of cities as dense concentrations of people. They are that, of course. But they are also dense concentrations of capital – homes, offices, factories, theaters and roads. All of these assets are attractive to people because, when they are in close proximity to each other, they offer the chance of a more prosperous life.

The problem is that once capital is built, it can become a target for tax-and-spend politicians who bank on the fact that physical capital will continue to draw people, even as it is taxed more heavily. This is what has happened in Baltimore. The city has waged a war on capital for more than 50 years, raising property taxes an astonishing 21 times from 1950 to 1985.
I don't own in this city, I rent (mostly to allow for a quick escape when the restless natives completely take over), but if I did own this would be my number one complaint with Baltimore. Even before high crime, lackluster public services, non-existent public transportation and high income tax. I'm always surprised at the number of people who live outside of the city that think property taxes within Baltimore are low. Only because in their mind they would have to be; otherwise why would anyone live in Baltimore? It's a good questionm that the political leadership in the city might want to ask themselves.

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