6 ms·

I think infrastructure in some places in the U.S. ends up looking a bit like a ponzi scheme. Example city--Charlotte, NC. Down south in Charlotte there is an a

I think infrastructure in some places in the U.S. ends up looking a bit like a ponzi scheme. Example city--Charlotte, NC. Down south in Charlotte there is an area called Ballantyne. Ballantyne has good schools, new everything, etc. Ballantyne also has high taxes. So what do people do? Move 5-10 minutes down the road into South Carolina where there is abundant land. They start developing. More people move in. Schools are built. They fill up. They build new ones. People complain about the old two lane country roads so they are expanded. Taxes go up to support this. Then either people keep playing the move game to a new undeveloped area or the ROI calculation that nobody does on infrastructure catches up with the town. Some can support it, others can't and it's a downward spiral. I'm not sure I've explained this well. I mostly think about this from the human POV, which I didn't even mention above. The rational thing for someone living in the high tax area is to go to the new area as it is developing and everything is new and then to decamp before things go so far downhill that property values drop. Game theory? Tragedy of the Commons? What all is at play here and then as importantly, how do we do better?

ellius 7y ago
It's sort of a "Tragedy of Systems." It's very easy for negligent or malicious actors to make bad decisions in a system context, but to have the consequences of those decisions not manifest in the same time or place as where the decision occurred. This makes it really easy to screw things up without suffering the consequences in complex systems, and people often make decisions for their personal benefit ignorant of or willfully ignoring the consequences.
- heymijo 7y ago
  I like how you phrased that and take it to the system level to think about it. It reminds me of Indianapolis, Cleveland, and their metropolitan areas. In 1969 Indianapolis created a "Unigov" merging with its surrounding county, and all of the suburbs within it.[0] The Unigov concept has been studied a lot. General view is it was a net positive, with one of those benefits being a shared vision, shared tax base, etc. Contrast that with the city of Cleveland and its metropolitan area. The city and its suburbs are distinct places. Suburbs on the east side and west side compete with downtown to give economic incentives to draw businesses away from each other. For example, American Greetings (the card maker) moved its long-time HQ from Brooklyn, Ohio (a Cleveland suburb) to Westlake, Ohio (another Cleveland suburb). Westlake lured American Greetings with incentives that Brooklyn could not match. The net benefit to the region is likely nil, but the benefit to Westlake, and the loss to the other suburb is demonstrable. [0] https://www.cgr.org/consensuscny/docs/CaseStudies_ec-unigov514.pdf https://www.cgr.org/consensuscny/docs/CaseStudies_ec-unigov5...
- khawkins 7y ago
  I think all of the above comments hint at this but don't state this explicitly: One of the general problems with growth is that it always and necessarily plateaus, and the growth stage has different dynamics compared to the plateau stage. When your town/business/country is growing it is easy to leverage the future because there is more wealth to spare. In the growth period, investing in a new park/office space/spending program is totally rational if it helps improve growth and quality of life now, given that repaying that debt will be easy later. But once growth slows down, our expectations of progress must also wane. This is hard for many people to accept because they think that past growth was paid for with past success, when the reality is that it was paid for with current success.
  - heymijo 7y ago
    > because they think that past growth was paid for with past success, when the reality is that it was paid for with current success. Wow, great contribution. I appreciate so much when anyone can pull a nugget out of my ramblings and explain it back to me in a clearer way. To add on to what you said and to bring this back to infrastructure, I think another challenge in the plateau phase is that you either need to spend a lot to keep old infrastructure working or massively reinvest to upgrade the infrastructure. If you've plateaued without expectations of future success, where do you get the funds to do either?
- m463 7y ago
  I think "externalities" are the tragic part of many systems. It would be interesting to have a "simcity" or "simearth" that a democratic society could run before making decisions about taxation or climate laws or policy. It might also be good to implement policies with an expiration date, and update the model as things play out. Then cancel policies that haven't met the promises. (Of course this is all probably nerd fantasy)
save_ferris 7y ago
Completely agree. Add to this the tiny (wealthy) municipalities built into existing communities that create favorable tax scenarios for themselves while living close to and using public infrastructure that they effectively aren't paying for. The Westlake and Rollingwood municipalities in the Austin area come to mind. 2019 taxes paid on a $1M home in Rollingwood: $2,053 [0] 2019 taxes paid on a $1M home in Austin: $20-30k 0: https://www.statesman.com/news/local/rollingwood-taxes-set-increase-for-upcoming-year/YSjuSTmdIrg3NaH6wHD4SN/ https://www.statesman.com/news/local/rollingwood-taxes-set-i...
- vinay427 7y ago
  Aren't there county property taxes in addition to city taxes that should create a more balanced situation? If I recall correctly, the places I've lived in (where those weren't the same entity) had both.
  - save_ferris 7y ago
    County funds don’t pay for city infrastructure. They’re two separate entities with different financial responsibilities. They don’t just share tax revenue with each other.
    - vinay427 7y ago
      I realize that, but there's no universal definition of "city infrastructure." It really doesn't mean anything consistent. Many municipal projects that are accessible to non-residents of a city (e.g. roads but not typically schools) are partially funded by counties, states, and the federal government.
- hexis 7y ago
  When I put your values into this calculator (https://tax-office.traviscountytx.gov/properties/property-tax-basics https://tax-office.traviscountytx.gov/properties/property-ta...), I found that the house in Rollingwood would have about 2K in City of Rollingwood taxes (just as you said), but the house in Austin would only have about 4K in City of Austin taxes, not 20-30K. All other property taxes were the same between the two properties. The overall property tax burden in Austin (adding county, school, etc taxes) for a million dollar house would be 20,298, while in Rollingwood (with the same additional tax categories), it would be 18,388. Certainly the taxes in Rollingwood are lower, but with hardly as big of a gap as you wrote. How did you get your numbers?
dragontamer 7y ago
Pretty simple solution: infrastructure investment is handled at the State-level. If there are infrastructure investments that go beyond a state's borders, you rely upon National-level government to debate and allocate infrastructure investment. > Game theory? Tragedy of the Commons? What all is at play here and then as importantly, how do we do better? Market failure. Independent actors working for their own self-interest will create a failure in long-term thinking. You address this the same as any other market failure: you create a larger, 3rd party entity which is trusted. This trusted entity allocates funds and makes bigger decisions that the smaller groups of people cannot do efficiently.
- bobthepanda 7y ago
  You'd also need to do that for * schools * police/fire/ambulance * pretty much any locally allocated service Which would pretty much be political suicide in any state.
  - dragontamer 7y ago
    Not really. The important bit is that some-degree of resource should be left to higher-level stuff. Ex: Few people bats an eye at FAFSA, which encompasses a nation-wide accreditation system for colleges and nation-wide student loan assistance. There are national-level Police forces: ICE, FBI, and ATF to name a few. Obviously, political groups have taken issue with how these agencies operate, but their efficacy cannot be denied: they can do things more efficiently than local police forces.
    - bobthepanda 7y ago
      Colleges get their tuition from students, so the location of where the student's family lives is mostly irrelevant outside of in-state vs. out-of-state. Schools are funded by local property tax and the districts are drawn pretty locally, as are police and fire. They are also subject to the same vicious cycle of people move in -> demand better services -> local taxes go up -> the rich childless leave -> tax base suffers -> local taxes go up, etc.
- 7y ago
ThrustVectoring 7y ago
>the ROI calculation that nobody does on infrastructure catches up with the town This is municipalities using cash accounting instead of accrual accounting. Infrastructure has a known lifespan, and instead of amortizing the cost of replacement over it, the cost is realized all at the end when it must get replaced.
burlesona 7y ago
I think you're seeing it pretty clearly :) This stuff works exactly like a Ponzi Scheme, that's actually something Strong Towns explores in a lot of detail. There's a topic page about it here: https://www.strongtowns.org/the-growth-ponzi-scheme/ https://www.strongtowns.org/the-growth-ponzi-scheme/
- heymijo 7y ago
  > in a lot of detail You aren't kidding. It's a 5-parter! Thanks for linking this. It's in my Pocket queue to dig into.
AtlasBarfed 7y ago
Sprawl taxes are badly badly needed in the united states. Really it's just the inherent assumptions of the "science" of economics. Nature and wildlife are worthless, except maybe as backdrops for the bay window of a McMansion. Maybe a park provides tourism? Oh you mean destroying all the wildlife and natural preserves of the world might destroy us all in a couple centuries (but a blink of the eye on geological timescales)? Nah, no concern. We only care about the quarterly revenues. It's not just the tragedy of the commons. That old economic saw is just about inconveniencing your fellow humans by shitting on things they need. It still doesn't encompass any notions of conservation. Game theory is misapplied reductionism and oversimplification of the real world (which is what economics is too, which is why that is the darling math discipline of economics).
- bedobi 7y ago
  Uh... Economists advocate making carbon and land prices reflect their true costs. Identifying, studying and correcting market failures, internalizing externalities etc are some of the most fundamental concerns of Economics as a field.
  - AtlasBarfed 7y ago
    That is a niche movement, especially the one publicly espoused by "economics". The public face of economics, and therefore the one used to justify policy enaction is highly skewed by think tanks, endowed chairs, consultancies, and restricted hiring into the fed and other economics policy seats. Economics can only produce costs on what it can measure and accurately estimate. Economics can't even produce accurate estimations on the restricted space of human economic activity. How can it POSSIBLY produce accurate estimations for the multiple orders of magnitude more complicated biological and natural worlds? In fact all that does is provide fear, uncertainty, and doubt to the regressive economists and the polluters, and allow them plenty of denial room as they externalize costs of pollution and dumping and destruction on society as a whole. This is a "science" where the mere mention of any regulation is still considered fundamentally wrong to a powerful, well-funded, and very public sizable portion of the intellectuals. And since that aligns with the rich and privileged of the world, it will continue to be the most public and pronounced aspect of the "science".

ellius 7y ago

It's sort of a "Tragedy of Systems." It's very easy for negligent or malicious actors to make bad decisions in a system context, but to have the consequences of those decisions not manifest in the same time or place as where the decision occurred. This makes it really easy to screw things up without suffering the consequences in complex systems, and people often make decisions for their personal benefit ignorant of or willfully ignoring the consequences.

heymijo 7y ago
I like how you phrased that and take it to the system level to think about it. It reminds me of Indianapolis, Cleveland, and their metropolitan areas. In 1969 Indianapolis created a "Unigov" merging with its surrounding county, and all of the suburbs within it.[0] The Unigov concept has been studied a lot. General view is it was a net positive, with one of those benefits being a shared vision, shared tax base, etc. Contrast that with the city of Cleveland and its metropolitan area. The city and its suburbs are distinct places. Suburbs on the east side and west side compete with downtown to give economic incentives to draw businesses away from each other. For example, American Greetings (the card maker) moved its long-time HQ from Brooklyn, Ohio (a Cleveland suburb) to Westlake, Ohio (another Cleveland suburb). Westlake lured American Greetings with incentives that Brooklyn could not match. The net benefit to the region is likely nil, but the benefit to Westlake, and the loss to the other suburb is demonstrable. [0] https://www.cgr.org/consensuscny/docs/CaseStudies_ec-unigov514.pdf https://www.cgr.org/consensuscny/docs/CaseStudies_ec-unigov5...
khawkins 7y ago
I think all of the above comments hint at this but don't state this explicitly: One of the general problems with growth is that it always and necessarily plateaus, and the growth stage has different dynamics compared to the plateau stage. When your town/business/country is growing it is easy to leverage the future because there is more wealth to spare. In the growth period, investing in a new park/office space/spending program is totally rational if it helps improve growth and quality of life now, given that repaying that debt will be easy later. But once growth slows down, our expectations of progress must also wane. This is hard for many people to accept because they think that past growth was paid for with past success, when the reality is that it was paid for with current success.
- heymijo 7y ago
  > because they think that past growth was paid for with past success, when the reality is that it was paid for with current success. Wow, great contribution. I appreciate so much when anyone can pull a nugget out of my ramblings and explain it back to me in a clearer way. To add on to what you said and to bring this back to infrastructure, I think another challenge in the plateau phase is that you either need to spend a lot to keep old infrastructure working or massively reinvest to upgrade the infrastructure. If you've plateaued without expectations of future success, where do you get the funds to do either?
m463 7y ago
I think "externalities" are the tragic part of many systems. It would be interesting to have a "simcity" or "simearth" that a democratic society could run before making decisions about taxation or climate laws or policy. It might also be good to implement policies with an expiration date, and update the model as things play out. Then cancel policies that haven't met the promises. (Of course this is all probably nerd fantasy)

save_ferris 7y ago

Completely agree. Add to this the tiny (wealthy) municipalities built into existing communities that create favorable tax scenarios for themselves while living close to and using public infrastructure that they effectively aren't paying for. The Westlake and Rollingwood municipalities in the Austin area come to mind. 2019 taxes paid on a $1M home in Rollingwood: $2,053 [0] 2019 taxes paid on a $1M home in Austin: $20-30k 0: https://www.statesman.com/news/local/rollingwood-taxes-set-increase-for-upcoming-year/YSjuSTmdIrg3NaH6wHD4SN/ https://www.statesman.com/news/local/rollingwood-taxes-set-i...

vinay427 7y ago
Aren't there county property taxes in addition to city taxes that should create a more balanced situation? If I recall correctly, the places I've lived in (where those weren't the same entity) had both.
- save_ferris 7y ago
  County funds don’t pay for city infrastructure. They’re two separate entities with different financial responsibilities. They don’t just share tax revenue with each other.
  - vinay427 7y ago
    I realize that, but there's no universal definition of "city infrastructure." It really doesn't mean anything consistent. Many municipal projects that are accessible to non-residents of a city (e.g. roads but not typically schools) are partially funded by counties, states, and the federal government.
hexis 7y ago
When I put your values into this calculator (https://tax-office.traviscountytx.gov/properties/property-tax-basics https://tax-office.traviscountytx.gov/properties/property-ta...), I found that the house in Rollingwood would have about 2K in City of Rollingwood taxes (just as you said), but the house in Austin would only have about 4K in City of Austin taxes, not 20-30K. All other property taxes were the same between the two properties. The overall property tax burden in Austin (adding county, school, etc taxes) for a million dollar house would be 20,298, while in Rollingwood (with the same additional tax categories), it would be 18,388. Certainly the taxes in Rollingwood are lower, but with hardly as big of a gap as you wrote. How did you get your numbers?

dragontamer 7y ago

Pretty simple solution: infrastructure investment is handled at the State-level. If there are infrastructure investments that go beyond a state's borders, you rely upon National-level government to debate and allocate infrastructure investment. > Game theory? Tragedy of the Commons? What all is at play here and then as importantly, how do we do better? Market failure. Independent actors working for their own self-interest will create a failure in long-term thinking. You address this the same as any other market failure: you create a larger, 3rd party entity which is trusted. This trusted entity allocates funds and makes bigger decisions that the smaller groups of people cannot do efficiently.

bobthepanda 7y ago
You'd also need to do that for * schools * police/fire/ambulance * pretty much any locally allocated service Which would pretty much be political suicide in any state.
- dragontamer 7y ago
  Not really. The important bit is that some-degree of resource should be left to higher-level stuff. Ex: Few people bats an eye at FAFSA, which encompasses a nation-wide accreditation system for colleges and nation-wide student loan assistance. There are national-level Police forces: ICE, FBI, and ATF to name a few. Obviously, political groups have taken issue with how these agencies operate, but their efficacy cannot be denied: they can do things more efficiently than local police forces.
  - bobthepanda 7y ago
    Colleges get their tuition from students, so the location of where the student's family lives is mostly irrelevant outside of in-state vs. out-of-state. Schools are funded by local property tax and the districts are drawn pretty locally, as are police and fire. They are also subject to the same vicious cycle of people move in -> demand better services -> local taxes go up -> the rich childless leave -> tax base suffers -> local taxes go up, etc.
7y ago

ThrustVectoring 7y ago

>the ROI calculation that nobody does on infrastructure catches up with the town This is municipalities using cash accounting instead of accrual accounting. Infrastructure has a known lifespan, and instead of amortizing the cost of replacement over it, the cost is realized all at the end when it must get replaced.

burlesona 7y ago

I think you're seeing it pretty clearly :) This stuff works exactly like a Ponzi Scheme, that's actually something Strong Towns explores in a lot of detail. There's a topic page about it here: https://www.strongtowns.org/the-growth-ponzi-scheme/ https://www.strongtowns.org/the-growth-ponzi-scheme/

heymijo 7y ago
> in a lot of detail You aren't kidding. It's a 5-parter! Thanks for linking this. It's in my Pocket queue to dig into.

AtlasBarfed 7y ago

Sprawl taxes are badly badly needed in the united states. Really it's just the inherent assumptions of the "science" of economics. Nature and wildlife are worthless, except maybe as backdrops for the bay window of a McMansion. Maybe a park provides tourism? Oh you mean destroying all the wildlife and natural preserves of the world might destroy us all in a couple centuries (but a blink of the eye on geological timescales)? Nah, no concern. We only care about the quarterly revenues. It's not just the tragedy of the commons. That old economic saw is just about inconveniencing your fellow humans by shitting on things they need. It still doesn't encompass any notions of conservation. Game theory is misapplied reductionism and oversimplification of the real world (which is what economics is too, which is why that is the darling math discipline of economics).

bedobi 7y ago
Uh... Economists advocate making carbon and land prices reflect their true costs. Identifying, studying and correcting market failures, internalizing externalities etc are some of the most fundamental concerns of Economics as a field.
- AtlasBarfed 7y ago
  That is a niche movement, especially the one publicly espoused by "economics". The public face of economics, and therefore the one used to justify policy enaction is highly skewed by think tanks, endowed chairs, consultancies, and restricted hiring into the fed and other economics policy seats. Economics can only produce costs on what it can measure and accurately estimate. Economics can't even produce accurate estimations on the restricted space of human economic activity. How can it POSSIBLY produce accurate estimations for the multiple orders of magnitude more complicated biological and natural worlds? In fact all that does is provide fear, uncertainty, and doubt to the regressive economists and the polluters, and allow them plenty of denial room as they externalize costs of pollution and dumping and destruction on society as a whole. This is a "science" where the mere mention of any regulation is still considered fundamentally wrong to a powerful, well-funded, and very public sizable portion of the intellectuals. And since that aligns with the rich and privileged of the world, it will continue to be the most public and pronounced aspect of the "science".