Category Archives: Politics

American property taxes have feudal roots

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American property taxes have a long history in English law:

The origins of the property tax aren’t American at all. It, instead, has roots that date back to Europe’s feudal system. First instituted in England by William the Conqueror in 1066, the early tax system worked this way: A king (or conqueror) took over all the land in a given territory. He would then divide it among his lieutenants and supporters, who would pay him (with money or services) in order to keep that land. In return, landholders enjoyed the king’s protection and were able to rent the property out to others—who would live and work the land—for a fee. The punishment for nonpayment was forfeiture of the land, which could result in a considerable loss of money and status. At the time, this system was called “free and common socage,” according to John Joseph Wallis, an economic historian at the University of Maryland. The person who held the land was called a socman, his taxes, socage. The arrangement created a way for people to own land while still having to remain loyal to the crown, which also had rights to the land.

After expansion across the Atlantic started, King James made sure that this system traveled overseas with the first settlers at Jamestown, so that he could partake in the profits of exploration of the new land. The charter of the Virginia Company held that—as in feudal times—the king would protect the lands in Jamestown, and in return, the people living on the land would pay him a share of their profits there. All land of the colony would be held in “free and common socage,” according to the Virginia Company charter. This meant that land could be bought and sold in the colonies, as long as the new holder of land continue to pay the king.

And why did the system persist even after the American Revolution?

It’s a peculiar note of history that the founding fathers, who spoke often of abolishing the feudal system, kept this remnant of the Old World. But the rationale is very simple: They needed the money. In fact, the federal government levied a national property tax in 1798, 1814, 1815, 1816, and 1861. The tax in 1798, for example, charged households for their slaves (50 cents), houses, and land. It raised $2 million, according to Wallis. These taxes usually outraged residents, who would often revolt, but the system of collecting property tax remained. That’s because property taxes were locally spent and collected in the beginning, and often paid for things like roads and canals that property owners would be able to see, and that increased the value of their property.

If indeed property taxes are the most hated tax for Americans, I wonder if residents would prefer the alternatives. One advantage of the property tax is that the monies are often spent closer to home, usually on local school districts and municipal services. Eliminate the property tax and taxes may be collected by governmental groups further way that have fewer responsibilities to local residents. Americans may not like property taxes but they do like local control.

 

Indianapolis’ Univgov only worked because schools were not included

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The Univgov created in Indianapolis in 1970 may have only gone forward because it didn’t unite all local governments; it intentionally left out school districts.

The celebrated unified government, or “Unigov,” law brought together about a dozen communities in Marion County into a single large city in 1970. The idea was to put a bigger, more powerful Indianapolis onto the national map, simplify city services, and grow the city’s tax base. Indianapolis was not the only city in the country to merge with its surrounding county at that time—but it was the only one to explicitly leave schools out of the deal…

The judge who ordered the busing, Samuel Dillin, stated bluntly that a merged city that left 11 separate school districts was racially motivated. At the time, a majority of the region’s African American and minority students lived in the city center while the surrounding school districts primarily enrolled white students.

“Unigov was not a perfect consolidation,” then-Mayor Richard Lugar said. He went on to be one of Indiana’s most legendary political leaders as a six-term U.S. Senator. “A good number of people really wanted to keep at least their particular school segregated.” Lugar said he knew the 162-page Unigov bill would die in the Indiana General Assembly if schools were included. But he still thinks the merger was worth it, despite the effects it has had on schools…

Unigov’s legacy for Indiana education is mixed at best, but neither Lugar nor Cierzniak think a future Marion County school district merger—one way some scholars say segregation can be reduced—is likely. Township districts have grown considerably, and the state legislature has heard district consolidation plans over the years that have repeatedly failed.

Uniting metropolitan governments is a difficult task, primarily for reasons like this: wealthier, whiter, often suburban residents do not often want to share their resources – particularly schools – with those who are not as wealthy and white. When the middle-class and above look for places to live, they often prioritize the school district and if it has a record of higher performance, will fight to keep others out. These wealthier residents want their tax dollars, especially those based on their better housing values, to go to their children and community. And the white-black divide is often the most difficult line to cross in such situations.

As another recent example, see the case of when Ferguson, Missouri students were given the chance to leave their unaccredited school district. Some parents in the new school district do not react well.

Neither presidential candidate says much about helping the poor

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This has become common in recent election cycles: candidates focus on the middle class and ignore the poor.

The United States, the wealthiest nation on Earth, also abides the deepest poverty of any developed nation, but you would not know it by listening to Hillary Clinton or Donald J. Trump, the major parties’ presidential nominees.

Mrs. Clinton, speaking about her economic plans on Thursday near Detroit, underscored her credentials as an advocate for middle-class families whose fortunes have flagged. She said much less about helping the 47 millions Americans who yearn to reach the middle class.

Her Republican rival, Mr. Trump, spoke in Detroit on his economic proposals four days ago, and while their platforms are markedly different in details and emphasis, the candidates have this in common: Both promise to help Americans find jobs; neither has said much about helping people while they are not working.

So why don’t they address lower-class Americans? A few tentative guesses:

  1. More undecided voters are in the middle class.
  2. Candidates want a singular message and so they go with the largest group of Americans – a vast majority of Americans, even ones who are legitimately rich or poor, consider themselves middle class – as to not have to complicate their rhetoric.
  3. The efforts in the 1990s to limit welfare – changes to programs and public housing – were very effective in halting conversation about poverty on a national level.
  4. Candidates want to be associated with people who think they have made it on their own.
  5. Lower-class Americans don’t have as much money to give to campaigns.
  6. Even with growing inequality, Americans have settled on the idea that we are a middle-class country. Candidates want to go with what the country thinks.

Regardless of the reason, it does say a lot about the ability of Americans to even converse about being poor.

Sociology prof behind San Jose measure to raise business taxes

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Sociologist Scott Myers-Lipton has worked to raise business taxes in San Jose:

With little discussion, the council unanimously approved putting a November ballot measure before city residents that would double annual business tax revenue from $12.7 million to $25.4 million. But the business tax voters will decide differs significantly from what Scott Myers-Lipton, the San Jose State University sociology professor who had led a successful 2012 campaign to raise the minimum wage in the city, had proposed last year.

Myers-Lipton was close to gathering enough signatures to qualify his measure for the ballot, but withdrew it to allow for the city compromise measure.

The measure the council approved for the ballot would increase the annual “base rate” businesses pay by $45 and then charge companies with three or more employees $30 to $60 for each worker, depending on the company’s size, capping at $150,000 a year. It would include inflation adjustments. The city’s current tax is $18 per employee for companies with eight or more workers without inflation increases and caps at $25,000.

Myers-Lipton’s proposed measure would have charged large companies based on their gross receipts, either 60 cents, 90 cents or $1.20 for every $1,000 in revenue. The model, he argued, has been successful in other large cities like San Francisco, Oakland and Los Angeles. A city study estimated the change would put an extra $39 million annually into the city’s pocket for services like public safety, roads and libraries.

It sounds like a typical political conversation about taxes. On one side, proponents argue that businesses should pay more, particularly when needed local services are on the line. On the other hand, proponents suggest businesses will leave and/or not locate in San Jose and instead locate in places with cheaper taxes.

Yet, does it make any difference that this tax proposal was brought forward by a sociologist? Conversations about public sociology sometimes suggest that sociologists have limited ability to bring about policy change. This would seem to be a positive example: sociologist who helped bring about a raise in the minimum wage now has a chance to help pass an increased tax on businesses. Both measures could be viewed as moves toward lessening inequality; this is a cause that many sociologists would support. At the same time, do Myers-Lipton’s moves differ much from typical liberal proposals?

Perhaps many businesses in San Jose can afford such an increase with the wealth in the area. Such a tax may not hurt very much in a thriving area compared to a struggling Rust Belt city.

Kaine as VP could bring in needed suburban voters

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VP nominee Tim Kaine is a former big city mayor who has successfully attracted voters in metropolitan areas:

As the former mayor of Richmond, Kaine is the first (relatively) big-city mayor on either party’s national ticket since Democrats nominated Hubert Humphrey, the mayor of Minneapolis in the 1940s, as their presidential candidate in 1968.

In that sense, Kaine’s selection symbolizes the Democrats’ growing reliance on—and dominance of—metropolitan America. Democrats now control the mayor’s office in 23 of the 26 largest cities. The party’s presidential coalition is rooted in the cities and most populous inner suburbs. In 2012, Obama won 86 of the nation’s 100 largest counties, amassing a total advantage over Mitt Romney in them of nearly 12 million votes, according to calculations by the Pew Research Center. That allowed Obama to win comfortably, even though Romney won more than three-fourths of all the nation’s counties; the 100 largest counties alone provided nearly half of the president’s total votes…

“By the time he ran for governor in 2005, Kaine had his model and it made sense for a Richmond mayor to run this way: He ran as a polished, well-educated suburban/urban candidate,” said Larry Sabato, the director of the University of Virginia’s Center for Politics. Sabato moderated a televised debate between Kaine and Kilgore and remembers being “stunned” at the contrast in styles. “Kilgore was the favorite and he was supposed to win,” Sabato recalled. “But he came across as the southwest Virginian he had once been. He had the southwest Virginia twang; he was not particularly polished. Kaine was so dominant it was almost embarrassing at times; I felt as the moderator I almost had to stop [the fight].”…

Clinton and Kaine will be counting on this same pattern of strong metropolitan showings to offset what could be a stampede toward Trump in non-urban areas far beyond Virginia. The same equation is key to the Democrats’ hopes in other competitive Sunbelt states like Colorado, North Carolina, Nevada, and Florida, as well as familiar Rustbelt battlegrounds like Ohio, Pennsylvania, Wisconsin, and Iowa. “The Virginia model,” says Sabato, “is now the national Democratic model.”

Recent presidential cycles have had Democrats solidly winning cities, Republicans solidly winning rural areas, and the two parties fighting over suburban voters (Republicans winning the exurbs, Democrats winning inner-ring suburbs). Both their efforts thus far – Trump on law and order and Clinton on making the country fairer for the working and middle class – could be viewed as efforts to appeal to these middle suburbanites. What exactly do suburbanites want these days from candidates? Good jobs and schools? Safety? Access to the American Dream? The outcome of this election may just hinge on who is best able to move beyond their reliable geographic bases and court suburbanites.

How Illinois residents want to close the budget gap

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A recent report sums up how Illinois residents between 2008 and 2016 want to address the state’s budget issues:

First, here’s how people want to address the budget deficit, according to the most recent polling.

Party Cuts Both Revenues Haven’t Thought Don’t Know/Other
Total 47% 33% 10% 4% 6%
Democrats 36% 36% 16% 5% 7%
Republicans 60% 32% 4% 3% 2%
Independents 50% 34% 9% 4% 3%
SOURCE: Paul Simon Institute of Public Policy…
So maybe we don’t want to cut our way to a balanced budget after all. Which makes sense, since it’s more or less impossible to do so without gutting programs that people support and use. That makes the next question all the more relevant: What new revenues do people favor?…
But there’s one thing that is relatively popular: soaking the rich. And the more closely targeted the policy is towards the rich, the more popular it is…
All in all, it’s a good measure of why we’re in such chaos. We claim we want to cut our way out of the problem, but only one type of cut (pensions) gets even close to an overall majority and is constitutionally prohibited. We’re actually in favor of higher taxes, but only in forms that are constitutionally prohibited, not that even an advisory referendum on a millionaire’s tax can make it onto the ballot. And one of the governor’s pet projects, extremely popular among the electorate and a potentially valuable piece of political leverage, would most likely do little to alleviate any of these problems.

Not a very hopeful analysis. In other words, voters and politicians have worked together to put together plans that significant portions of voters liked (i.e., pensions) but then neither want to enact certain changes (spending cuts and new taxes) that would help solve the past problems.

Is this good evidence for hitting a reset button on the entire state government? Bankruptcy to deal with existing debts? A completely new tax structure? More broadly, a new state constitution? Past actions in a bureaucracy tend to constrain certain future actions while enabling others…has Illinois simply run out of palatable options?

First Medicare patient was in Naperville

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Edward Hospital in Naperville will on July 20 celebrate the first Medicare patient in American history:

A Chicago Tribune reporter informed 68-year-old Avery she would be the first citizen to have her bills paid under the then-new program. Her amused reply, “Oh boy! Now I can go to New York and get on the television program ‘I’ve Got A Secret.'”

It was no secret when Avery signed her Medicare forms in her hospital bed on July 1, 1966, the day the program went into effect for nearly 20 million Americans age 65 or older. In addition to front-page coverage in the Tribune, an Associated Press photographer snapped Avery’s picture, which made its way across the country and into numerous other newspapers and publications…

“Edward Hospital, birthplace of Medicare” is how Carlson wryly refers to the event. Carlson is the one who chose Avery for her distinction.

“The reason I was given the right to choose was that I was a member of the communications staff at the national Blue Cross Association,” Carlson said. He and the head of communications at the U.S. Social Security Administration coordinated Avery’s form-signing and photo opportunity.

Although Naperville was still a small town at the time – under 10,000 residents – this illustrates how social networks can help push small communities into the spotlight. Even large bureaucratic programs have to start somewhere and a personal connection between the Blue Cross Association and the Social Security Administration made this possible.

The article says the hospital will dedicate a plaque and hold a small ceremony to make the anniversary. Is this the best way to mark social welfare programs? How many people will know that the plaque exists and view it? The United States regularly crafts memorials for particular people, whether notable leaders (like the proposed Eisenhower memorial in Washington D.C.) or collections of soldiers, but doesn’t mark government programs as well. A memorial to the New Deal? The Monroe Doctrine? The Interstate Act? All of these were incredibly consequential yet it is more difficult to envision where and how these should be marked.

Charlotte mayor: rural areas of states hold back big cities

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Charlotte mayor Jennifer Roberts discusses the relationship between state legislators and big cities:

ROBERTS: Remember, this is Charlotte. There’s always a way out of the impasse. This is absolutely not something that just Charlotte is facing. I talk to mayors: In Seattle, they have rural areas that often don’t understand what they’re doing—Phoenix, Atlanta, so many other cities have this challenge. And this is a critical issue in America because we have many states that are still controlled largely by rural legislators. And there are different needs. We’re not a one-size-fits-all country. So if you are in a rural area, you’re thinking about things differently. If you’re in a densely developed, urban center that’s dynamic, where change happens every day, you’re looking at things differently than if you’re in a town or rural community where things haven’t changed in decades. And so, my worry for America is that we have states that are holding our cities back.

We have read that cities are the center of innovation. They are laboratories for how we face the 21st century, how we solve the energy crisis, how we work on climate change, how we make sure people are included, how we work on public safety in an increasingly diverse universe of people who are moving, are transient, are mingling, and are living close together. And how do we solve all those issues if we have a rural mentality where things are static? We don’t have the tools. This is a great challenge in America: How do we convey that it’s okay to be different? I love our rural areas. I spend time in the mountains, in small cities, and small towns. We have wonderful people in North Carolina. But, how do we show them that we’re not competing with them in our cities, that it’s not diminishing them? That we are actually providing sales tax for them? Just let Charlotte be Charlotte. Let Charlotte work.

On the one hand, this could be a very real issue: leaders in Charlotte likely want very different things from leaders in small towns and rural counties. This urban-rural dynamic happens in many states, including Illinois where it is Chicago vs. downstate.

On the other hand, I’m guessing states also provide some benefits for cities. Does Charlotte receive a lot of state funding? Are there certain programs or initiatives that it would be hard even for a large city to put together themselves? Think of things like entitlement programs or the DMV or state roads.

I imagine relationships between city and rural leaders could be more beneficial to both in numerous states if they sought to maximize each other’s advantages…but this is unlikely to happen. The urban-rural divide has a long history in the United States going back to an urban North and agrarian South as well as competing visions of idyllic small town life versus the bustling, innovative metropolis.

Claim: liberals love cities due to “snobbery, graft, and politics”

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Glenn Reynolds argues liberals like cities for self-serving reasons:

The snobbery comes from the fact that most media are headquartered in big cities and the people who work there are the kind of people who like big cities — often people who, as one of Taylor Swift’s songs has it, move to a “big ole city” in part as revenge on the places they come from. As Kotkin notes, the writers, pundits and academic types who write on the subject of cities tend to live in big cities; suburban and rural people are treated as losers, or just ignored, despite the fact that most people don’t live in big cities. And there’s a class thing going on, too. As Robert Bruegmann noted in his book, Sprawl: A Compact History, nobody minds when rich people build houses in the country. It’s when the middle class does it that we get complaints.

The graft is probably more important still: Big developments mean lots of permissions, many regulatory interactions and, of course, big budgets — all of which lend themselves to facilitating the transfer of money from developers to politicians. Frequently they’re government subsidized, which allows that money to come, ultimately but almost invisibly, from the pockets of taxpayers…

Finally, there’s politics. Politicians like to pursue policies that encourage their political enemies to leave, while encouraging those who remain to vote for them. (This is known as “the Curley effect” after James Michael Curley, a former mayor of Boston.)  People who have children, or plan to, tend to be more conservative, or at least more bourgeois, than those who do not. By encouraging high density and mass transit, urban politicians (who are almost always on the left) encourage people who might oppose them to “vote with their feet” and move to the suburbs.

This isn’t necessarily good for the cities they rule. Curley’s approach, which involved “wasteful redistribution to his poor Irish constituents and incendiary rhetoric to encourage richer citizens to emigrate from Boston,” as David Henderson wrote on the EconLog, shaped the electorate to his benefit. Result: “Boston as a consequence stagnated, but Curley kept winning elections.”

A quick response to each of these claims:

  1. I think there is indeed some urban snobbery among academics. Comparatively, there is little attention paid to suburbs even though a majority of Americans live there. Yes, it is convenient to study cities as many research schools are in large cities but to look down on other areas – usually viewed as conservative, backward, and less cosmopolitan – is not good.
  2. Cities do indeed have a lot of regulations. This is almost inevitable given their complexity. Think of cities with power laws rather than linear relationships; doubling the population doesn’t simply create twice the complexity but rather four times. As conservatives have pointed out recently, pretty much all major American cities are run by Democrats and there corruption scandals keep emerging. Yet, conservatives are not immune to such city scandals – see the example of Big Bill Thompson in Chicago. How about a different explanation: big government invites opportunities for malfeasance for all (and Democrats happen to be in charge of most big cities today)?
  3. This is an interesting argument as much as has been made in recent decades about the negative effects of white flight as well as efforts by many cities to attract younger, wealthier residents. Did big city mayors really try to keep conservatives out of cities? Take Chicago again as an example. The mayors and residents did as much as they could to stem the movement of non-whites into certain parts of the city and were fairly successful for decades. But, when their tools disappeared and demographics changed, many left. Did Mayor Richard J. Daley want this? At the same time, Daley made deals with black South Side politicians to have a reliable voting bloc. Perhaps this isn’t exactly the argument; cities really don’t want suburbanites or suburban living. Yet, David Rusk has argued for years that elastic cities – those that have been able to capture suburban growth (mostly in the South and West) – are more successful ones. So, are cities spiting themselves simply to keep a party in power?

Of course, these three reasons ignore other reasons for liking cities: economic opportunities (which both cities and suburbs can benefit from), diverse neighborhoods and public spaces, people watching, and physical and social features not found elsewhere (from skyscrapers to symphony orchestras). Even though suburbia may be more self-sustaining that many give it credit for, imagining a world of suburbs where Americans can live free without having any major cities is very difficult to imagine.

“Federal Officials Push to Urbanize Suburbia”?

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Conservatives are still worried the Obama administration is against suburbs:

In its final months, the Obama administration has set up a strategy to bring inner city living to the suburbs by deploying three federal agencies to dictate to states and local communities how to set up schools, housing and mass transit…

The Department of Housing and Urban Development (HUD) expanded the reach of its Affirmatively Furthering Fair Housing (AFFH) rule to two other federal agencies: the Department of Transportation and the Department of Education…

State and local educational agencies, for example, are urged to develop “boundary-free open enrollment or lottery schools when drawing school attendance boundaries, and selecting sites for such a programs like charter schools or magnet school.”

The three federal agencies also want their local and state education officials to “consult with transportation and housing authorities and housing development agencies” when planning a school site.

The federal authorities want local and state transportation officials to create mass transit plans and more public transportation routes, as well as include local school districts, housing authorities, Head Start programs, community colleges and similar entities in putting together the mass transit plan.

The first two thoughts that come to mind when seeing the specifics here:

  1. It sounds like this applies to communities that receive HUD block grants for redevelopment. So, if suburbs don’t apply for this, the guidelines may not apply.
  2. At the least, the guidelines would encourage more conversations between some important actors – like developers, local officials, school districts, transportation planners, and others – that could build upon and expand existing infrastructure. Instead of doing all of their work independently, a little collaboration could go a long ways.

In other words, wealthier suburbs will still have ways to resist lower-income residents. And isn’t what this is really about? Or, more broadly, suburbs want the ability to have complete local control over land use – which is all about quality of life, property values, and attracting the right kind of people. For example, see this statement from a Westchester County official:

“This document proves what I’ve been saying for six years: The federal government is planning to take control of the American suburb and forever change it in the false name of equality. If HUD gets its way, small town America will literally disappear. It will be forcibly urbanized by Washington social engineers.”

Suburbs are unlikely to disappear anytime soon. Plus, market forces may lead to denser suburbs anyway as there is plenty of demand for new housing in attractive suburbs. But, there could be more conflict in the future as wealthier communities want to retain control and regional and federal governments try to spread opportunities around.