What would Rocky think?

Big property tax hike coming in Philadelphia.  This is exactly the wrong path cities should be taking and will ultimately lead to more problems down the road as residents flee to suburbs or to other places altogether.  Cities should be encouraging, rather than disincentivizing, urban living through lower taxes, less regulation, greater school choice, and relaxed zoning laws – not to mention better policing.

2 thoughts on “What would Rocky think?

  1. As a resident of the Philly suburbs already, I think this needs some fleshing out. First, Philly already disincentivizes leaving the city by imposing a huge property transfer tax. (Last time I looked, it was 4%.)

    Then there’s the question of comparison: Are taxes lower in the suburbs already? The answer is, No, not really — and we already pay about $300/year for trash removal. (I was shocked to learn from the linked story that Philly resident don’t already pay for that.) So moving out of the city will nail you on the transfer tax, and moving to the suburbs won’t save you much in property tax. Sounds pretty much like a wash to me.

  2. Thanks for the response Damon. Indeed, I had you in mind when I wrote.

    I noted that “Cities should be encouraging, rather than disincentivizing, urban living through lower taxes, less regulation, greater school choice, and relaxed zoning laws – not to mention better policing.”

    So here I wasn’t talking just about people fleeing to the suburbs – I’m also talking about the things cities do to make it less likely that people will choose to move into cities in the first place and more likely that they will leave an area altogether.

    So that tax you mention is part of the story of providing a disincentive to moving in in the first place — people know that they will be stuck with a big tax if they move into the city and someday have to relocate.

    As for the exit issue, people will often move out of an area altogether – so even if the Philly suburbs are not necessarily less costly, the whole area is compared to other parts of the country. A study Jason did shows a strong positive correlation between state freedom and exit – and I’m guessing the same is the case for cities. NY, NJ, Penn, etc are losing people to freer states, even controlling for climate.

    So the problem for Philly isn’t the suburbs as much as other states. This is one of the virtues of federalism – it allows for tax competition.

    And as for the suburbs, given the lower crime and better schools (thanks to a lack of school choice), cities can’t just match the fiscal and regulatory costs of the suburbs, they have to beat them.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s