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City dwellers dramatically subsidize American suburbs and rural areas. Roads, water, the electric grid, communication networks, hospitals, fire suppression, law

City dwellers dramatically subsidize American suburbs and rural areas. Roads, water, the electric grid, communication networks, hospitals, fire suppression, law enforcement, courts, schools, mail delivery, .... public infrastructure and services get more expensive per capita when people are more spread out. On top of that, the federal government intentionally spends large amounts of money in poorer areas of the country (e.g. on military bases and weapons contractors) as an explicit geographical wealth redistribution scheme. 80 years ago the rural poverty in many parts of America was a story of shocking destitution. If people want to reduce the tax burden on folks with low incomes just scraping by, the way to accomplish that is by increasing taxes on corporate profits, very large incomes, large inheritances, etc., expand enforcement against tax evasion, and eliminate legal or quasi-legal tax-avoidance loopholes. However, the wealthy in this country have largely succeeded in a 50-year campaign to redistribute wealth upward.

black6 8y ago
> If people want to reduce the tax burden on folks with low incomes just scraping by, the way to accomplish that is by increasing taxes on corporate profits, very large incomes, large inheritances, etc. However, the wealthy in this country have largely succeeded in a 50-year campaign to redistribute wealth upward. It's an unpopular opinion (because of the propaganda campaigns waged by the wealthy), but a wealth tax is very much needed in this country. The income tax is fundamentally designed to prevent the accumulation of wealth. So us worker bees bear the costs of financing government, while the wealthy, who owing to their accumulated wealth, do not need or have an income, get to reap the benefits.
- twblalock 8y ago
  The wealthy paid taxes on their wealth back when it was income. And they pay capital gains tax if their wealth grows.
  - s73v3r_ 8y ago
    Only if they realize those gains.
    - twblalock 8y ago
      Why should unrealized gains be taxed?
      - derefr 8y ago
        You can get interest-free loans against your illiquid assets. With enough income coming in to replace the spent money, it's essentially as if you're spending the illiquid assets themselves, without having had to liquidate (and thereby pay taxes on) them.
        twblalock 8y ago
        This is really more like using the illiquid assets as collateral, not like spending them. The loan payments still need to be made from income, or by liquidating assets, both of which would be taxed.
        derefr 8y ago
        It's plain-old collateral if you're just spending the money normally, sure. But you can also take that loan and use it as leverage on a bet (i.e. a risky investment.) Then, your upside is more untaxed capital gains; while your downside can be immediately repaid by liquidating the assets, leaving you only with the need to pay the taxes. There is a reason that investment firms exist: this process is a ratchet for making untaxed (or less-taxed) income.
        twblalock 8y ago
        But the monthly loan payments need to be made somehow, no matter what you use the loan for. If you pay them with income, you paid income tax. If you pay them by liquidating assets (including assets you purchased with the loan money and then sold), you pay capital gains tax (unless you sell for a loss).
  - ubernostrum 8y ago
    "The wealthy" generally structure their income to avoid it being "income", or hide it in jurisdictions the US can't see, or any of dozens to hundreds of other tricks to make sure they don't pay anything resembling their share. This is a game as old as the US income tax itself; the 16th Amendment wasn't passed to legalize income taxes (they were already legal), but to make sure Congress could tax income "from whatever source derived", since wealthy people were restructuring their income streams to try to avoid taxation. They still do that today.
    - twblalock 8y ago
      That's an argument for changing the income tax rules, not for adding a wealth tax. In any case, a wealth tax would be easy to game too. There is a lot of room for loopholes in the definition of wealth, what kind of wealth should be taxed, what the tax brackets should be, what kinds of deductions are allowed, etc.
      - VintageCool 8y ago
        We need to rebuild the Inheritance Tax. Hit the wealth at the moment of inheritance, when it acts as income for the next generation. I'm worried about the decline of the inheritance tax. It's happening all over the West. In France, "the incomes attained by the top 1% of French inheritors are already higher than those attained by the top 1% of workers". We could be headed back to a Jane Austen -esque society where ambitious young people seek their fortunes in marriage, rather than in business.
  - frockington 8y ago
    And then sales tax when they buy things and an estate tax when they die.
  - Latteland 8y ago
    A lot of really wealthy people inherited their wealth, they aren't doing anything useful.
- ams6110 8y ago
  The wealthy pay the vast majority of all the income tax already. https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-u-s-taxpayers-paid-majority-of-income-taxes-in-2016 https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-...
  - crooked-v 8y ago
    https://www.washingtonpost.com/news/wonk/wp/2017/12/06/the-richest-1-percent-now-owns-more-of-the-countrys-wealth-than-at-any-time-in-the-past-50-years/ https://www.washingtonpost.com/news/wonk/wp/2017/12/06/the-r... > The wealthiest 1 percent of American households own 40 percent of the country's wealth, according to a new paper by economist Edward N. Wolff.
    - lordlimecat 8y ago
      There's probably some good discussion to be had around that, but whenever anyone in the US talks about the injustice of the top 1%, I can't help but wonder: if we calculated how much of the world's wealth the 99% in America owned, would they feel contrition for their injustice? Given that the US has 25% of the world's wealth, and the lower 99% of the US population has 60% of the US's wealth, it stands to reason that "the 99%" have a full 15% of the world's total wealth. Given that the US has ~4% of the world's population, surely resolving "the wealth disparity" is more likely to lower their position than raise it.
      - Brockenstein 8y ago
        This is pretty disingenuous and I'll explain why. The next 1% after the top 1% owns a pretty sizable chunk too. And the next 1% after that a large chunk, and so on. The top 10% has 75% of U.S. wealth, the top 20% has 87% of U.S. wealth. So carrying on about the 99% as if wealth is distributed in anyway evenly within that group is more than a bit silly. Especially when you look at the bottom 50% having a pittance, somewhere between 1-2% of U.S. wealth. The next natural group after discussing the 1%'s wealth, isn't the other 99% just because 100-1=99... So really your argument falls apart for me because most of the 99%, the bottom 70%, end up owning just about 1% of the world's wealth. And that's a fairly small slice of pie to be split between 227 million people. And before you show me the math that it's actually quite a bit per person. Don't forget that in reality the bottom 60% only has almost as much wealth as the whole next 10% and that most of the population isn't seeing the wealth you're describing.
- closeparen 8y ago
  The 401k and IRA are inverse wealth taxes, so naturally you want to eliminate those, right? After all, no one should be so wealthy as to not need or have an income (retire).
  - 8note 8y ago
    seems reasonable. you already can't contribute above some amount tax free, and you shouldnt have more than 30M dollars put away for retirement
kodablah 8y ago
> City dwellers dramatically subsidize American suburbs and rural areas I am not convinced this is accurate, at least in some cases. In some cases, suburbs raise much more capital in taxes per person, are often required by the state to give some back for redistribution (e.g. education), attract business much more these days than city centers, provide much needed infrastructure for city-based businesses to house their employees, and provide many services that are leveraged by urbanites unable to attain similar quality locally (e.g. hospitalization). The unfortunate realization is that many inner cities suffer due to government-based mismanagement and often lean on thriving surburban areas and state handouts to help. It goes both ways. > If people want to reduce the tax burden on folks with low incomes just scraping by, the way to accomplish that is by increasing taxes Others believe to reduce the tax burden, you need to reduce expenditures, especially waste. The classist redistribution argument is a great way to let budget makers off the hook for mismanagement while blaming your peers.
- landryraccoon 8y ago
  > . In some cases, suburbs raise much more capital in taxes per person, are often required by the state to give some back for redistribution (e.g. education), attract business much more these days than city centers, provide much needed infrastructure for city-based businesses to house their employees, and provide many services that are leveraged by urbanites unable to attain similar quality locally (e.g. hospitalization). Can you find a citation for this claim? Strong Towns did a blog about this and found that downtown areas produce far more tax revenue per acre than suburbs. Source : https://www.strongtowns.org/journal/2018/8/7/growing-lasting-wealth-in-cobb-county?rq=value%20per%20acre https://www.strongtowns.org/journal/2018/8/7/growing-lasting... Another effect given is that suburbs and rural areas require far more investment in infrastructure per capita. In short, rural areas and suburbs require way more roads than downtown, and fewer people live there per mile of road to boot. So fewer people are paying taxes to support even more roads. I would be very curious to see a study that showed the opposite effect, and how it could be possible.
  - kodablah 8y ago
    Which claim? Why did we change from per capita to per acre? Seems like an underhanded way for StrongTowns to make a point (I disagree with most of the "StrongTowns" approach as ideologically driven and opposed to the practicalities people prefer). This is the way these goal-driven ideologues muster support. I don't think you can link a source about a specific area or two as refutation of a point about some suburbs, especially when you change from per person to amount of land. > In short, rural areas and suburbs require way more roads than downtown, and fewer people live there per mile of road to boot. So fewer people are paying taxes to support even more roads. I know it can read like common sense (I won't ask for a study from you or anything), but it also reads like common sense that a more traveled road requires significantly more maintenance costs. These are just not binary things that you can answer this way. > I would be very curious to see a study that showed the opposite effect, and how it could be possible. Opposite effect of which part? Do I really have to provide a study to show some suburbs incur a financially heavier burden due to their neighboring city than vice versa?
ams6110 8y ago
> the tax burden on folks with low incomes just scraping by Low income folks just scraping by don't pay taxes as it is -- at least not income taxes.
- ethagknight 8y ago
  Particularly relatively to services provided, tax refunds, health insurance premium assistance, free schooling.
chimeracoder 8y ago
> If people want to reduce the tax burden on folks with low incomes just scraping by, the way to accomplish that is by increasing taxes on corporate profits This is completely wrong. The poor either don't pay income taxes or pay very little income tax, because the marginal tax rates for low income levels are so low. That's by design. Wherever the tax is levied - on corporations or on individuals - doesn't affect the incidence of the tax; that is, who really pays, at the end of the day. When you tax corporations, that actually increases the tax burden on the very poor. The amount that they are directly paying in April[0] might be the same, but the total burden of the tax is passed on to both workers and shareholders alike, in the form of lower wages, lower dividends, and lower share prices. [0] well, withheld in every paycheck, but same idea
- jschwartzi 8y ago
  Except that corporations have various tax-reduction tools available that are not available to anyone but the super-wealthy. They can move their profits offshore, move wealth around between holding companies, apply for R&D tax credits, and generally arrange things so as to avoid taxes. Whereas the average middle-class person has virtually no access to these things without leading a very specific lifestyle.
tomohawk 8y ago
Not in our neck of the woods. The jobs are all in the suburbs and the cities grasp at any kind of subsidy they can get their hands on. The schools there are crumbling and bumbling. People don't feel safe. The roads are barely passable. Population is in decline, moving to where the wealth and jobs are. The wealthiest 1400 people in the US pay as much tax as the least wealthy 50%. EDIT: citation: https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-u-s-taxpayers-paid-majority-of-income-taxes-in-2016?srnd=premium https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-...
coolboy93290 8y ago
"by increasing taxes on corporate profits, very large incomes, large inheritances, etc., expand enforcement against tax evasion, and eliminate legal" Have the rich write laws to tax themselves? We hope so.
- Latteland 8y ago
  I don't get your point, you probably aren't sarcastic? The wealthy effectively do write tax laws for themselves, through their capture of the congress, and the use of divisive social issues to trick poor people into voting to cut their own social safety network.

black6 8y ago

> If people want to reduce the tax burden on folks with low incomes just scraping by, the way to accomplish that is by increasing taxes on corporate profits, very large incomes, large inheritances, etc. However, the wealthy in this country have largely succeeded in a 50-year campaign to redistribute wealth upward. It's an unpopular opinion (because of the propaganda campaigns waged by the wealthy), but a wealth tax is very much needed in this country. The income tax is fundamentally designed to prevent the accumulation of wealth. So us worker bees bear the costs of financing government, while the wealthy, who owing to their accumulated wealth, do not need or have an income, get to reap the benefits.

twblalock 8y ago
The wealthy paid taxes on their wealth back when it was income. And they pay capital gains tax if their wealth grows.
- s73v3r_ 8y ago
  Only if they realize those gains.
  - twblalock 8y ago
    Why should unrealized gains be taxed?
    - derefr 8y ago
      You can get interest-free loans against your illiquid assets. With enough income coming in to replace the spent money, it's essentially as if you're spending the illiquid assets themselves, without having had to liquidate (and thereby pay taxes on) them.
      - twblalock 8y ago
        This is really more like using the illiquid assets as collateral, not like spending them. The loan payments still need to be made from income, or by liquidating assets, both of which would be taxed.
        derefr 8y ago
        It's plain-old collateral if you're just spending the money normally, sure. But you can also take that loan and use it as leverage on a bet (i.e. a risky investment.) Then, your upside is more untaxed capital gains; while your downside can be immediately repaid by liquidating the assets, leaving you only with the need to pay the taxes. There is a reason that investment firms exist: this process is a ratchet for making untaxed (or less-taxed) income.
        twblalock 8y ago
        But the monthly loan payments need to be made somehow, no matter what you use the loan for. If you pay them with income, you paid income tax. If you pay them by liquidating assets (including assets you purchased with the loan money and then sold), you pay capital gains tax (unless you sell for a loss).
- ubernostrum 8y ago
  "The wealthy" generally structure their income to avoid it being "income", or hide it in jurisdictions the US can't see, or any of dozens to hundreds of other tricks to make sure they don't pay anything resembling their share. This is a game as old as the US income tax itself; the 16th Amendment wasn't passed to legalize income taxes (they were already legal), but to make sure Congress could tax income "from whatever source derived", since wealthy people were restructuring their income streams to try to avoid taxation. They still do that today.
  - twblalock 8y ago
    That's an argument for changing the income tax rules, not for adding a wealth tax. In any case, a wealth tax would be easy to game too. There is a lot of room for loopholes in the definition of wealth, what kind of wealth should be taxed, what the tax brackets should be, what kinds of deductions are allowed, etc.
    - VintageCool 8y ago
      We need to rebuild the Inheritance Tax. Hit the wealth at the moment of inheritance, when it acts as income for the next generation. I'm worried about the decline of the inheritance tax. It's happening all over the West. In France, "the incomes attained by the top 1% of French inheritors are already higher than those attained by the top 1% of workers". We could be headed back to a Jane Austen -esque society where ambitious young people seek their fortunes in marriage, rather than in business.
- frockington 8y ago
  And then sales tax when they buy things and an estate tax when they die.
- Latteland 8y ago
  A lot of really wealthy people inherited their wealth, they aren't doing anything useful.
ams6110 8y ago
The wealthy pay the vast majority of all the income tax already. https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-u-s-taxpayers-paid-majority-of-income-taxes-in-2016 https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-...
- crooked-v 8y ago
  https://www.washingtonpost.com/news/wonk/wp/2017/12/06/the-richest-1-percent-now-owns-more-of-the-countrys-wealth-than-at-any-time-in-the-past-50-years/ https://www.washingtonpost.com/news/wonk/wp/2017/12/06/the-r... > The wealthiest 1 percent of American households own 40 percent of the country's wealth, according to a new paper by economist Edward N. Wolff.
  - lordlimecat 8y ago
    There's probably some good discussion to be had around that, but whenever anyone in the US talks about the injustice of the top 1%, I can't help but wonder: if we calculated how much of the world's wealth the 99% in America owned, would they feel contrition for their injustice? Given that the US has 25% of the world's wealth, and the lower 99% of the US population has 60% of the US's wealth, it stands to reason that "the 99%" have a full 15% of the world's total wealth. Given that the US has ~4% of the world's population, surely resolving "the wealth disparity" is more likely to lower their position than raise it.
    - Brockenstein 8y ago
      This is pretty disingenuous and I'll explain why. The next 1% after the top 1% owns a pretty sizable chunk too. And the next 1% after that a large chunk, and so on. The top 10% has 75% of U.S. wealth, the top 20% has 87% of U.S. wealth. So carrying on about the 99% as if wealth is distributed in anyway evenly within that group is more than a bit silly. Especially when you look at the bottom 50% having a pittance, somewhere between 1-2% of U.S. wealth. The next natural group after discussing the 1%'s wealth, isn't the other 99% just because 100-1=99... So really your argument falls apart for me because most of the 99%, the bottom 70%, end up owning just about 1% of the world's wealth. And that's a fairly small slice of pie to be split between 227 million people. And before you show me the math that it's actually quite a bit per person. Don't forget that in reality the bottom 60% only has almost as much wealth as the whole next 10% and that most of the population isn't seeing the wealth you're describing.
closeparen 8y ago
The 401k and IRA are inverse wealth taxes, so naturally you want to eliminate those, right? After all, no one should be so wealthy as to not need or have an income (retire).
- 8note 8y ago
  seems reasonable. you already can't contribute above some amount tax free, and you shouldnt have more than 30M dollars put away for retirement

kodablah 8y ago

> City dwellers dramatically subsidize American suburbs and rural areas I am not convinced this is accurate, at least in some cases. In some cases, suburbs raise much more capital in taxes per person, are often required by the state to give some back for redistribution (e.g. education), attract business much more these days than city centers, provide much needed infrastructure for city-based businesses to house their employees, and provide many services that are leveraged by urbanites unable to attain similar quality locally (e.g. hospitalization). The unfortunate realization is that many inner cities suffer due to government-based mismanagement and often lean on thriving surburban areas and state handouts to help. It goes both ways. > If people want to reduce the tax burden on folks with low incomes just scraping by, the way to accomplish that is by increasing taxes Others believe to reduce the tax burden, you need to reduce expenditures, especially waste. The classist redistribution argument is a great way to let budget makers off the hook for mismanagement while blaming your peers.

landryraccoon 8y ago
> . In some cases, suburbs raise much more capital in taxes per person, are often required by the state to give some back for redistribution (e.g. education), attract business much more these days than city centers, provide much needed infrastructure for city-based businesses to house their employees, and provide many services that are leveraged by urbanites unable to attain similar quality locally (e.g. hospitalization). Can you find a citation for this claim? Strong Towns did a blog about this and found that downtown areas produce far more tax revenue per acre than suburbs. Source : https://www.strongtowns.org/journal/2018/8/7/growing-lasting-wealth-in-cobb-county?rq=value%20per%20acre https://www.strongtowns.org/journal/2018/8/7/growing-lasting... Another effect given is that suburbs and rural areas require far more investment in infrastructure per capita. In short, rural areas and suburbs require way more roads than downtown, and fewer people live there per mile of road to boot. So fewer people are paying taxes to support even more roads. I would be very curious to see a study that showed the opposite effect, and how it could be possible.
- kodablah 8y ago
  Which claim? Why did we change from per capita to per acre? Seems like an underhanded way for StrongTowns to make a point (I disagree with most of the "StrongTowns" approach as ideologically driven and opposed to the practicalities people prefer). This is the way these goal-driven ideologues muster support. I don't think you can link a source about a specific area or two as refutation of a point about some suburbs, especially when you change from per person to amount of land. > In short, rural areas and suburbs require way more roads than downtown, and fewer people live there per mile of road to boot. So fewer people are paying taxes to support even more roads. I know it can read like common sense (I won't ask for a study from you or anything), but it also reads like common sense that a more traveled road requires significantly more maintenance costs. These are just not binary things that you can answer this way. > I would be very curious to see a study that showed the opposite effect, and how it could be possible. Opposite effect of which part? Do I really have to provide a study to show some suburbs incur a financially heavier burden due to their neighboring city than vice versa?

ams6110 8y ago

> the tax burden on folks with low incomes just scraping by Low income folks just scraping by don't pay taxes as it is -- at least not income taxes.

ethagknight 8y ago
Particularly relatively to services provided, tax refunds, health insurance premium assistance, free schooling.

chimeracoder 8y ago

> If people want to reduce the tax burden on folks with low incomes just scraping by, the way to accomplish that is by increasing taxes on corporate profits This is completely wrong. The poor either don't pay income taxes or pay very little income tax, because the marginal tax rates for low income levels are so low. That's by design. Wherever the tax is levied - on corporations or on individuals - doesn't affect the incidence of the tax; that is, who really pays, at the end of the day. When you tax corporations, that actually increases the tax burden on the very poor. The amount that they are directly paying in April[0] might be the same, but the total burden of the tax is passed on to both workers and shareholders alike, in the form of lower wages, lower dividends, and lower share prices. [0] well, withheld in every paycheck, but same idea

jschwartzi 8y ago
Except that corporations have various tax-reduction tools available that are not available to anyone but the super-wealthy. They can move their profits offshore, move wealth around between holding companies, apply for R&D tax credits, and generally arrange things so as to avoid taxes. Whereas the average middle-class person has virtually no access to these things without leading a very specific lifestyle.

tomohawk 8y ago

Not in our neck of the woods. The jobs are all in the suburbs and the cities grasp at any kind of subsidy they can get their hands on. The schools there are crumbling and bumbling. People don't feel safe. The roads are barely passable. Population is in decline, moving to where the wealth and jobs are. The wealthiest 1400 people in the US pay as much tax as the least wealthy 50%. EDIT: citation: https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-u-s-taxpayers-paid-majority-of-income-taxes-in-2016?srnd=premium https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-...

coolboy93290 8y ago

"by increasing taxes on corporate profits, very large incomes, large inheritances, etc., expand enforcement against tax evasion, and eliminate legal" Have the rich write laws to tax themselves? We hope so.

Latteland 8y ago
I don't get your point, you probably aren't sarcastic? The wealthy effectively do write tax laws for themselves, through their capture of the congress, and the use of divisive social issues to trick poor people into voting to cut their own social safety network.