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Old 05-16-2011, 01:31 PM
 
20,273 posts, read 32,877,652 times
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Quote:
Originally Posted by hempfield mania View Post
My point is, if taxes were lower, PGH would be doing EVEN BETTER than it is now (more than just holding its own through the recession and the recovery).
I dunno--I'm guessing having a police department actually matters.

Generally, people have studied this a lot, and there is no real evidence that the overall rate of local taxation is a big factor in economic development. Too many other things matter a lot more, and taxes pay for necessary services.

Of course you should try to eliminate as much waste as possible in government, but that is true at any level of taxation, and in any event the order has to be eliminate waste first, then lower taxes. People like to skip to the second part without doing the first, perhaps because doing the first is a lot harder than they would like to admit.

The other productive thing you can do is expand the tax base (e.g., eliminate loopholes and such) so that you can have lower overall rates, which helps reduce any economic distortions differential tax rates may be introducing. Unfortunately, even when proposed on a revenue-neutral basis, rabid anti-tax people will oppose such reforms on the grounds they are raising taxes on some entities.
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Old 05-16-2011, 01:44 PM
 
Location: Squirrel Hill
1,349 posts, read 3,559,307 times
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Maybe generally speaking local taxes aren't a big consideration but I think in Pittsburgh they are most likely a significant factor in keeping people out of living in the city. You pay triple the income tax and double the real estate transfer tax, you pay similar school taxes but either get relatively poor schools compared to what those same tax dollars will buy in (many of) the suburbs or send your kids to private school. This is significant amounts of money.

To live in the city of Pittsburgh as a middle or upper middle class family, you have to really want to do it.

I know here in Baltimore the city taxes keep people who might otherwise live in the City in the suburbs where you pay half and get more.
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Old 05-16-2011, 02:01 PM
 
20,273 posts, read 32,877,652 times
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Quote:
Originally Posted by Bong477 View Post
Maybe generally speaking local taxes aren't a big consideration but I think in Pittsburgh they are most likely a significant factor in keeping people out of living in the city. You pay triple the income tax and double the real estate transfer tax, you pay similar school taxes but either get relatively poor schools compared to what those same tax dollars will buy in (many of) the suburbs or send your kids to private school. This is significant amounts of money.
But you have to break that down to understand what is really going on. Again, what you have in the case of the City is: (a) a lot of people and entities benefiting economically from the existence of the City but paying very little in tax to the City; and (b) the City paying a lot of legacy costs to people outside the jurisdiction.

Simply lowering the existing tax rate on the existing tax base wouldn't fix either of those problems--it would just mean firing a bunch of police officers. To fix (b), you really need a reform of the state laws that make it impossible for the City to reduce its legacy costs. And to fix (a), you would need to expand the tax base.

Incidentally, encouraging people to work in the City but not live in the City is exactly the sort of distortion that I was talking about when noting that high tax differentials can introduce distortions.
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Old 05-16-2011, 03:45 PM
gg
 
Location: Pittsburgh
26,137 posts, read 25,777,749 times
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Quote:
Originally Posted by Bong477 View Post
Maybe generally speaking local taxes aren't a big consideration but I think in Pittsburgh they are most likely a significant factor in keeping people out of living in the city. You pay triple the income tax and double the real estate transfer tax, you pay similar school taxes but either get relatively poor schools compared to what those same tax dollars will buy in (many of) the suburbs or send your kids to private school. This is significant amounts of money.
Correct. It is much more expensive to live in the city, which is a shame. I really love the city, but as of now I can't see moving from my suburb. I am closer to downtown that parts of the city anyway and have no worries about schools, tons of litter and crime. Not to mention city taxes are even higher than were I live and you get much less in every way.
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Old 05-16-2011, 03:51 PM
 
Location: Western PA
3,733 posts, read 5,933,215 times
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I don't find the tax burden crushing at all. I feel I get generally good services from the city. Higher on my list is the convenience of having it all at my doorstep: arts and culture, museums, libraries, galleries, street life, parks, good public transport, excellent health care services, shopping, professional police, fire and EMS. It's a lifestyle choice and I can't imagining ever moving out. As I age, it's even more important to know that once I stop driving, I won't be isolated or stranded - I'll still be able to get out and about with a minimum of fuss without having to use a car.
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