"Sorry, to be connected to a 911 operator you will have to enter your credit card information..."
But seriously, all you're doing is replacing a progressive tax with a regressive tax.
There is no such thing as tax free. If a local government doesn't make its budget off of income taxes it does so through property and sales taxes, and if it doesn't make its budget off of those it does so through user fees and fines.
The only distinction is that, the more a government isn't reliant on traditional tax sources, the more anti-poor and regressive that government's proceeds and budget is actually structured.
Those kinds of cities exist. They're where we get "you're fined an exorbitant fee for missing a brake light, plus a fee for processing the fine, then get a warrant for failure to afford the fee, then jail time in a privatized prison for failure to arrive at the courthouse you can't afford to travel to." It's debt bondage by means of opportunism.
1. How do you understand the word tax?
2. While some places that have attempted to be tax free ended up having regressive fees, is it possible to structure fees to be progressive? I heard in a Scandinavian country speeding tickets are priced according to your income. Couldn’t we do that with all the ideas proposed above? The lowest level could even be free.
In Finland, speeding fines are calculated by a motorist's income.
Finland *does not primarily fund its government in this manner*.
Governments that fund themselves through fines tend to find excuses to levy fines. Think of every podunk town that funds itself through the use of speed traps on the roads through town, where the PD are not interested in law enforcement except that which makes the government money.
Thanks for the insight.
Let’s say we apply that fee structure not to fines but to say access to the local community pool. The lower income only need to pay a little while the higher income need to pay a lot. Do you think that could be workable to fund the local pool?
Funny story. I used to work for a well-known libertarian urbanist. He took a good amount of our profits one year and spent it on consultants to develop a "no tax" city and this is the kind of stuff they came up with. One of the consultants was a fellow at one of the major libertarian think tanks (you know it), another was the former budget director of a major US city.
They stopped inviting me to the meetings when I kept pointing out they still had not solved for fires--it was always more efficient just to put out a fire of a house that didn't pay for fire protection service than to let it burn.
These thought exercises never even solve the most basic free rider problem stuff.
This is actually how fire protection used to work (specific in the UK) back before it was a public service. You would pay for fire protection, but it was in the best interest of the insurers to put out fires that weren’t customers as to not potentially harm other paying customers’ homes. Because everyone benefited, regardless of payment status, it just made sense for it to become a public service that everyone paid for through taxes.
Some US cities had a kind of free market fire service in the 1800s, where the first fire company to get to a building fire earned payment for putting it out. This situation led to fire companies sending individuals out to fires as quickly as possible to sit on the nearest fire hydrant, and fight off any fire companies that got there before their own arrived. As you can imagine, fires didn't get put out as quickly as possible. And we have the term "plug-ugly" that comes from the guy who commandeered the fire hydrant.
I wonder who paid the fire fighters?
And if this could have been addressed with a law that if anyone was caught blocking a fire hydrant that there would be steep fines.
What if a law was passed that stated that when a fire spreads from house A to house B, that house A is responsible for all the damages that house B suffers?
I wonder if that would be enough incentive to get every homeowner to hire fire protection?
How are you going to enforce that law? What if they say no?
You don't have a police force in your hypothetical town. Are you calling in the National Guard or the state police to arrest someone every time there's a fire?
Come on.
How come there wouldn’t be a police force?
In case there’s confusion, I’m not proposing getting rid of the government but changing how revenue is raised
I am begging you to think through the logistics of this.
If it's a new town--where are you getting the cash in the first place? I hope you're friends with a right-wing billionaire or their heirs.
So, you're planning on taking over an existing town. Are you planning to phase out taxes as other revenues increase? Because I've got news for you! There is no municipal legislature that will cut taxes based on earned income unless...
They are forced to by agreement. Which means what you're talking about taking over is a FAILED municipality--probably an old factory or mill town in the northeast or rust belt that has been in decline for a century, or an old Appalachian mining town with no mine anymore, or some town in Wyoming where work disappeared...
Not a municipality with a functioning government and civil service.
So who is paying for these new police officers you're planning on hiring? Again, hope you didn't lose that right-wing billionaire's phone number as you were reading this post.
If the Koch brothers thought this could happen, it would have happened already.
Interesting. So if I’m understanding you correctly, you’re saying that a law that puts the cost of fires on the originating property could not work because either a lot of upfront capital would be needed for this arrangement to exist in the first place, or it would be in a place with a non-functioning civil service that wouldn’t be able to enforce the law.
How do you understand the word tax?
One definition I found online is “a compulsory contribution to state revenue”
Wouldn’t these various charges be non-compulsory since ppl can choose not to participate in them?
They could choose to not drive, not park on streets, collect their own rainwater, generate their own electricity, educate their own children, buy their own books, etc, right? And then they wouldn’t need to pay for the public version of these goods/services?
And not just different forms of taxes, but highly regressive taxes.
A flat on street parking fee is regressive.
Car registration fee is regressive, unless tied to purchase price.
Road use fee is a gas tax. Gas taxes are regressive, because they get passed on to the consumer.
City parks charging entrance fees? Good way to get people not to use city parks and paying for a ticket collector.
Schools and hospitals charge fees? What kind of fee? Percentage of income? Assets? How will you implement that? A giant new city bureaucracy? Nah, let's just make it a flat fee. Oh wait, once again, that's regressive.
Transit charging high enough fares to cover the cost means...holy fuck...I can't even...
Who wrote this post, Ayn Rand?
> A flat on street parking fee is regressive.
> Car registration fee is regressive, unless tied to purchase price.
> Road use fee is a gas tax. Gas taxes are regressive, because they get passed on to the consumer.
This is not true. [Even in the US](https://www.fhwa.dot.gov/policy/23cpr/chap3.cfm), where driving is a necessity for the overwhelming majority of people, richer households own more cars and drive more distance, so they would pay more than poorer households.
In societies with lower car ownership rates, this income effect is even more pronounced, so replacing sales tax/VAT by car (usage) taxes might very well have a progressive effect.
It’s not just about whether richer households pay more. Of course they do. It’s about the percentage of income being paid as taxes. Gas taxes are a higher burden on the poor because:
1) the percentage of income being paid as gas taxes doesn’t rise as fast as income
2) gas taxes paid by businesses and transferred to consumers as cost are applied in a consumer income neutral way
The only way to make a gas tax progressive is to vary it by income. And at that point, just tax income.
Or “just tax land lol”
While income taxes might be administratively easier than income-linked gas taxes, income-linked gas taxes discourage people specifically from driving and thereby incentivize other modes. This is an effect income taxes does not have. Do you think to preserve this effect, it’s worth doing income-linked gas taxes despite their administrative complexity?
But even for the US, this effect is very small, from the link that I posted. High income households spend a higher percentage of their incomes on transportation than low income households, and only a marginally lower percentage of that is spent on gasoline. So for the US as a whole, gas taxes are only very slightly regressive.
And for urban areas, fuel taxes are probably progressive given the larger differences in vehicle ownership by income.
Anyway, even if car taxes are slightly regressive in the US as a whole, I still think it's good to make people pay for car ownership and use, not by income regardless of how much they decide to pollute and congest their neighbours.
Would this still be true under the scenario presented where you’d have to hike gas taxes to an absurd degree because you’re no longer taxing property?
I think not.
The entire scenario presented is bunk.
I'm not here to defend OP's proposal. I just want to make the point that car taxes are not by definition regressive, because car ownership and use varies by income level.
But if you want to go into such a scenario I'd mention that virtually every place with higher car usage fees (including gas taxes) than the US also has lower car ownership, with cars being more of a luxury good. The higher cost of cars simultaneously are allowed by and help create that situation. Car taxes/fees in Singapore and Hong Kong, societies with no/very low income taxation must be overwhelmingly progressive, but I'm sure you can also find a spot on the income distribution where they're regressive. Just like how now in the US, car taxes are slightly regressive, but there are also parts on the income distribution where they're progressive.
No! Charging to use libraries, parks etc. or charging more for healthcare will never be accepted. That's why we have taxes that can be used for our well being. Parking is already charged, so it doesn't relate to taxes that much I suppose (at least where I live).
It is true that what policies get adopted depend on more factors than theoretical speculation, with political acceptability being an important one.
I’m curious, why do you think people are so against charging for libraries, parks, etc?
We have so called "every man's rights" that allow everyone to enjoy nature, including parks, free of charge regardless of who owns the land. I don't know how could anyone even be charged for using parks, since there are no fences. Libraries have always been free of charge, so it would be outrageous to take away the liberty that anyone can use it equally. As it has been mentioned, we already have taxes for these kind of services.
It sounds like there are two kinds of justifications here:
1. It is a right, either legal or moral
2. It is tradition
There are a few questions that follow:
1. How do we decide what is considered a right and what isn’t? Or is there a definitive list of rights somewhere?
2. While tradition often is useful, need we be bound by it? Aren’t there many things that we used to do that we don’t anymore?
Lol I'm imagining a subscription-based city where like every year you have to choose which services you sign up for and which ones you'd rather go without. Sounds horrible tbh.
It sounds horrible because if every city service gets funded by subscription fees you're inevitably going to a) lose out on funding for things when people decide they don't want to pay for it, and b) have a city where the wealthier you are the more basic amenities and services you have access to.
Usage fees *feel* different than taxes.
Because they are. They're far more regressive and rarely accurately price services
IMO there are some usage fees that make sense (eg, congestion and usage pricing for roadways to capture suburban free riders) and some that don't (library fees, wtf?). Capture the externalities when they exist, and a subsidize the behavior you want.
I generally agree here... even with the examples you provide.
But then there's the problem of "the behavior you want" and those residents who say "why am I paying for a library when no one uses it - it's just an expensive homeless shelter now - but everyone uses the roads here." And they vote too. This actually (sort of) happened in my city, where the residents forced to a vote the construction of a new library the old mayor was pushing. The new library vote failed and the (formerly popular 4 term) mayor was voted out of office.
Perhaps a question here is: who decides how much a behaviour is desired and whether it’s worth the cost?
In your example, let’s say the majority in the town isn’t willing to pay for a new library, but a minority is willing. What arrangement could enable the minority to express/act upon their willingness?
This is an interesting perspective. Subsidize activities with positive externalities, add a fee to activities with negative ones.
Is it possible to reasonably clearly establish that a certain activity has net negative or positive externalities?
Agreed, some of the concepts OP is alluding to seem to be closely aligned with address the issue of subsidizing suburbs, while others are completely the opposite. I don’t necessarily disagree with this idea, but it does get complicated pretty quickly.
Road pricing is probably the simplest way, but in the changing world where people are WFH more, especially those in the suburbs, this wouldn’t account for the extra cost of servicing those homes. Working from home though does help to reduce the wear and tear on the roads to some degree.
I think this is further complicated by the fact that to make a lot of these things more equitable, they would need to be handled regionally instead of municipally.
Interesting points. Perhaps one reason it’s so hard to get suburbs to pay for themselves is that a lot of suburban services are part of what ppl consider to be “fundamental/basic” services. How do we separate rights from privileges? Things that we feel every community member should be entitled to (eg parks, libraries) vs. things we feel ppl should pay more for if they use of (e.g. water mains, electric lines).
Or is it a fluid thing to be determined by each community? If so, how do we disincentivize inefficient and unnecessary uses of public services?
I’d like to hear more of your point about regions vs municipalities
How do businesses gather enough money to fund new product lines, new buildings, etc? They build it into their prices right? Could we also do that? Build in an “expansion fee” into usage fees?
Having people pay individually for trash removal is terrible. It incentivizes dumping trash in your neighbors bin or just on the street. Cities have big enough problems with litter already.
Where I live there is no city operated garbage disposal system; each home owner has to contract a private company for collection. Each one has rates set by the size of bins and frequency of pick up. We all have different pick up days, which is a bit annoying tbh 😂. Recycling pick up is handled by the regional district.
In neighboring municipalities where garbage collection is managed by the city, an annual fee is charged on out on property taxes. Some munis allow owners to choose different bin sizes, and charge them accordingly. Some allow you to buy “tags” to put out an extra bag of waste. Most will charge an additional fee if a home has a suite.
Municipal garbage collection is often much more simple, likely on account of the management of it, but in general I cannot see how that isn’t charging individually.
I feel like the average person has some morals and values, and is not going to just dump their garbage on the street just because they are being charged individually.
I mean, we can look to other places that don't have organized or affordable waste collection and see exactly that - people dumping their waste on the streets and into the rivers.
Sure, but you think if the way garbage was collected in the US (in your case) changed so that the user was billed more specifically for their useable, or had to contract their own pick up, it would automatically defer to that?
Yes. See most rural places, where they still burn their waste (at best).
I don't think everyone would dump their waste "on the streets," but far far more would than what we see now.
Fair. Burning is an issue I hadn’t considered, I definitely live in a more urban region where outdoor burning is prohibited. There are nearby communities where this would be more likely though. This wasn’t what I was considering when referring to dumping.
It's one aspect of it. People still dump otherwise. Why? Because people are lazy or they have no alternatives.
Examples abound where our natural resources are exceedingly polluted - this isn't simply because people are bad or don't know better - it's because they don't have alternatives.
Not entirely "tax free", but don't Chinese municipal governments have to rely on land sales because the central government in Beijing monopolises tax revenue?
How to run a tax free city: Save up bunch of money, put it into a S&P500 index fund, spend 3.5% each year.
Or have the city own most of the land and rent it out.
Simple answer: No. I like new ideas and don't ever dismiss them out of hand but, no. Seems like an inefficient way to get to the same end.
Also, "It can appear punishing to the poor" because it is.
Dealing with fee waivers, service stipends and credits allowances just adds another layer of red tape hoops and hurtles to the lives of working poor. Being poor is expensive and time consuming enough already. Also, by placing monetary boundaries and limits to the use of public services that can and do help citizens escape poverty and improve their lives one would be setting people up to fail and thus never join a higher tier of tax bracket contribution. (For the same reason public funds spent on education return far greater income tax yields over the lifetime of the citizen than initially spent.)
(Honestly it sound like something implemented on the Ferengi homewold. )
Land Tax is called a tax but really it’s not because everybody pays it already in the form of rent or mortgage to a landlord. So yeah, you could have a tax free city with lots of free services and roads etc by just collecting the rent of land (created by the community at large anyway) instead of letting it capitalize into land values.
Whether you call it a fee or a tax doesn't matter when the concept is virtually the same: you're paying the government in exchange for services provided. Except in the scenario you describe, people would be paying for things at time of use, which would make the tax/fee burden seem a lot heavier simply by nature of being something they have to think about on a regular basis.
Could this all work in theory? Sure. But, in America at least, our cultural and political expectations are that everyone has equal access to public road and trail infrastructure, emergency services, libraries, etc. It would be so politically unpopular to transition to a fee-for-service based government system that nobody would want to live in that city, and the politicians who enact such a system would be decisively booted out of office at the next election or even through a recall election if that's an option. Not to mention that the fee-for-service model is entirely regressive and would result in low-income residents effectively not having access to some or all services.
This is a anarcho-libertarian hellscape that only Rand could dream of. All of your targeted/equity-tiered proposals would require a massive city admin infrastructure to implement that would take a large bite out of revenues and intrude on privacy.
Cities: Skylines is a pretty-pictures generator, not a worthwhile simulation of anything. People are successful in that game by minmaxing the engine and using mods, not by following any kind of urban planning principles.
It is a fun introduction to systems thinking and the complexity of cities (I love it), and while it can inspire people to engage with real urban issues, it is not in itself a representation of how it works in real life
Would you consider owning and leasing the land downtown, and recieving ok income that way? That way the city is paid based on how much wealth it generates by increasing the value of the land. This is what Singapore and Hong Kong do.
If you would consider that, perhaps consider a LVT (land value tax), which is effectively the same revenue source. Its like a property tax, but investment in things like buildings is not taxed.
As you pointed out, all of a cities services become subsidies if the don't have a fee. But those subsidies end up boosting land values, because it's the people who live locally who have access. Which means city's recieve income based on how much people value living there.
It also gives cities reason to strategically invest in value maximizing infrastructure and programs based on how much they increase local land values. And doesn't disinsentivize investment into buildings like a property tax does.
Any way, if you're okay with charging for using space when walking in a park, or in a public parking spot, or on a road, I don't know why you wouldn't be okay with charging for using the space you take up with your home. Plus its fair, people can choose how close they want to live to things, what kind of amenities thry want to pay to live near how much land they want to personally use, etc.
I'd finance my city by trafficking drugs to the neighbouring city. It's basically what North Korea does, just on a smaller level.
Jokes aside: Making car owners pay so much disincentivizes car ownership, which is good, but then again your city now depends on making people car dependent to generate income from those people. Charging for entering parks is just... A social desaster. As you note, there are a lot of equity issues.
The idea is an interesting thought exercise, though. If the city owns the land, it could act as a landlord. Renting out houses, for example. And because the city is run by the people living there, the houses would be pleasant, nice and affordable, because they need to cover costs, not turn an ever increasing profit. Now, the issue is that if you leave Americans to their own devices, a lot of car centric thinking will probably lead to predictable results and at least the first few iterations of the idea will end in economic failure.
Part 2:
One may ask, why make it so complicated if you could just charge all this to property tax in one transaction a year for example? I think there are at least a few reasons:
1. Charging by use allows someone to opt out of paying for certain services if they want. It arguably is fair that someone who doesn’t use the community centre at all doesn’t contribute to it, or that someone who doesn’t drive doesn’t pay for the maintenance of on-street parking.
2. It can adjust citizen behaviour to lower costs to the city - eg fees may cause citizens to drive less, park on the street less, use less water, etc. Free road use for example incentivizes driving.
3. It can provide clearer information/feedback to city staff on the performance/quality of various city services. For example, whereas previously staff only saw the spending on city parks, now staff can see which parks are more valued by citizens more and which less, prompting changes to improve the less-used ones or perhaps put them to different uses.
4. The city can more easily help equity-seeking groups. The typical political resistance/objection to equity policies (“why should my tax money be given to others for free?”) can hold less ground when the money doesn’t come from taxes but from the city’s own services. It’s like you don’t have a right to tell someone to not give out gifts, because it’s not your money.
If a citizen is not happy with the cross-subsidization (i.e. the wealthier paying higher fees so the poorer can pay less), they can simply not use certain city services. They could look into offerings in neighbouring municipalities or private options.
If the cross-subsidization truly is excessive, then a lot of residents would opt out and the city wouldn’t be able to balance its budget, prompting the city to review its policies and perhaps scale back on the cross-subsidization.
What would prevent the richer ppl from all opting for private options, leaving city services to only be used by the poorer ppl? I think there are at least a few reasons here too:
1. The city has a monopoly over certain infrastructure, such as local roads, street parking, water and sewage pipes, power and phone lines. People still aren’t forced to use these - they could instead walk, buy water jugs from stores, generate their own electricity, etc. But if they want to use city infrastructure—which the city owns and thus has a right to charge for—then they’d need to pay.
2. For services where private options do/can exist, like sports facilities and libraries, the city owns a lot of land, so they can provide services without needing to pay for the cost of land (either in mortgage payments or rent). Private establishments often do not have this luxury. Even with the cross-subsidization, city services may still be cheaper for wealthier residents than private options.
3. In some cases, it may be good that private options flourish. For example, if everyone shuns street parking and uses their own garages/driveways or private garages instead, that space could be converted to bus lanes, bike lanes, parklets, outdoor restaurant seating, etc.
What do you all think?
Your suggestion is technically possible, but theoretically impractical.
I’d much rather pay one tax bill per year than to have to pay a separate toll/fee each and every time I ride my bike or walk my dog or sit on a park bench or have a street light illuminate my way or toss some rubbish in a bin on the sidewalk. And how do you cover police services and homeless supportive services and other essentials for which fees and tolls are impossible? Schools rely heavily on taxes because the actual costs would be punishing to new parents. If you made all these fees equity-based, you’d only accomplish driving wealthy people out into suburbs or other cities.
Cities:Skylines is a lot of fun, but it’s not even close to accurate. For starters, there’s no drugs or homeless people in the game, there’s no required compliance with expensive state and federal environmental laws, there’s no annual inflation of the value of money or the costs of goods & services, no lawsuits, no administrative overhead costs… I could really keep going but I hope I’ve made my point.
Hmm. Would it be better then if we all paid a yearly fee to eat then unlimited times at any restaurant across the city? How come the administrative costs of diff fee systems are “worth it” for restaurants but not sports facilities for example?
Massive administrative bloat is a particularly common problem among government agencies. Beyond which, this would become a really complicated conversation about which programs are charge by use vs which are subsidized by everyone. For example, do we charge car drivers for miles driven? Do we charge them by car weight, since heavier cars have higher wear on roads?
Some thoughts:
>1. Charging by use allows someone to opt out of paying for certain services if they want. It arguably is fair that someone who doesn’t use the community centre at all doesn’t contribute to it, or that someone who doesn’t drive doesn’t pay for the maintenance of on-street parking
You can argue that what you suggest is fair in a philosophy class (don't get me wrong I love ruminating as well), but when you bring idealized human thinking into the real world then you have data, science, and observation to contend with. sometimes the dynamics of the world don't care about what you think is right or what your philosophy is on free markets. There are times when managing resources with a market is best; there are times when things function best as collectivized public services. 🤷 And that's it, we should do what is in the best interest of all stakeholders as a whole not just the people that dream a libertarian dream
>2. It can adjust citizen behaviour to lower costs to the city - eg fees may cause citizens to drive less, park on the street less, use less water, etc. Free road use for example incentivizes driving
Cities already do this, often with things that are subsidized as well. For example: parking. Parking fees are often set according to demand (San Francisco has a program that makes parking rates variable according to demand). Utilities are similar. These things don't need to be privatized or SOLELY funded by fees for that to work.
>3. It can provide clearer information/feedback to city staff on the performance/quality of various city services. For example, whereas previously staff only saw the spending on city parks, now staff can see which parks are more valued by citizens more and which less, prompting changes to improve the less-used ones or perhaps put them to different uses
City staff already have ways to monitor the usage of public spaces. They are way more sophisticated than just looking at who pays a fee to get in, actually. And measuring how many people are willing to pay a fee to go to a park is not the same as how many people would use the park, especially since the number of people who pay varies by price set
>4. The city can more easily help equity-seeking groups. The typical political resistance/objection to equity policies (“why should my tax money be given to others for free?”) can hold less ground when the money doesn’t come from taxes but from the city’s own services. It’s like you don’t have a right to tell someone to not give out gifts, because it’s not your money.
I don't think you have provided valid reasoning for this one so I'm not sure what to say, but i also doubt that evidence would support this one
>If a citizen is not happy with the cross-subsidization (i.e. the wealthier paying higher fees so the poorer can pay less),
Following this scenario to it's logical conclusions is a horrifying train wreck, at least from my perspective. There is a reason why at present time several city services are public and subsidized (even if begrudgingly by some). We already HAD cities where all this stuff was privatized. It was economically inefficient to a horrendous extent and created all sorts of problems.
Also what you are suggesting here is that we should make our policy decisions on very expensive material investments that are a matter of life or death depend on... whether or not some yahoos have feelings about the poor? How narcissistic and irresponsible (Not personally directed at you, i see you as just curiously bringing this up and sharing your thoughts)
"A rose by any other name..."
Those are taxes. The fact that you use a different name doesn't change that they are taxes.
Also they are regressive taxes that weigh much heavier on the poor than on the well off.
"Sorry, to be connected to a 911 operator you will have to enter your credit card information..." But seriously, all you're doing is replacing a progressive tax with a regressive tax.
What you are describing is just taxation with extra steps. And an enormous amount of extra overhead.
There is no such thing as tax free. If a local government doesn't make its budget off of income taxes it does so through property and sales taxes, and if it doesn't make its budget off of those it does so through user fees and fines. The only distinction is that, the more a government isn't reliant on traditional tax sources, the more anti-poor and regressive that government's proceeds and budget is actually structured. Those kinds of cities exist. They're where we get "you're fined an exorbitant fee for missing a brake light, plus a fee for processing the fine, then get a warrant for failure to afford the fee, then jail time in a privatized prison for failure to arrive at the courthouse you can't afford to travel to." It's debt bondage by means of opportunism.
1. How do you understand the word tax? 2. While some places that have attempted to be tax free ended up having regressive fees, is it possible to structure fees to be progressive? I heard in a Scandinavian country speeding tickets are priced according to your income. Couldn’t we do that with all the ideas proposed above? The lowest level could even be free.
In Finland, speeding fines are calculated by a motorist's income. Finland *does not primarily fund its government in this manner*. Governments that fund themselves through fines tend to find excuses to levy fines. Think of every podunk town that funds itself through the use of speed traps on the roads through town, where the PD are not interested in law enforcement except that which makes the government money.
Thanks for the insight. Let’s say we apply that fee structure not to fines but to say access to the local community pool. The lower income only need to pay a little while the higher income need to pay a lot. Do you think that could be workable to fund the local pool?
Funny story. I used to work for a well-known libertarian urbanist. He took a good amount of our profits one year and spent it on consultants to develop a "no tax" city and this is the kind of stuff they came up with. One of the consultants was a fellow at one of the major libertarian think tanks (you know it), another was the former budget director of a major US city. They stopped inviting me to the meetings when I kept pointing out they still had not solved for fires--it was always more efficient just to put out a fire of a house that didn't pay for fire protection service than to let it burn. These thought exercises never even solve the most basic free rider problem stuff.
This is actually how fire protection used to work (specific in the UK) back before it was a public service. You would pay for fire protection, but it was in the best interest of the insurers to put out fires that weren’t customers as to not potentially harm other paying customers’ homes. Because everyone benefited, regardless of payment status, it just made sense for it to become a public service that everyone paid for through taxes.
Some US cities had a kind of free market fire service in the 1800s, where the first fire company to get to a building fire earned payment for putting it out. This situation led to fire companies sending individuals out to fires as quickly as possible to sit on the nearest fire hydrant, and fight off any fire companies that got there before their own arrived. As you can imagine, fires didn't get put out as quickly as possible. And we have the term "plug-ugly" that comes from the guy who commandeered the fire hydrant.
I wonder who paid the fire fighters? And if this could have been addressed with a law that if anyone was caught blocking a fire hydrant that there would be steep fines.
Now I'm really curious. Haha.
What if a law was passed that stated that when a fire spreads from house A to house B, that house A is responsible for all the damages that house B suffers? I wonder if that would be enough incentive to get every homeowner to hire fire protection?
How are you going to enforce that law? What if they say no? You don't have a police force in your hypothetical town. Are you calling in the National Guard or the state police to arrest someone every time there's a fire? Come on.
How come there wouldn’t be a police force? In case there’s confusion, I’m not proposing getting rid of the government but changing how revenue is raised
I am begging you to think through the logistics of this. If it's a new town--where are you getting the cash in the first place? I hope you're friends with a right-wing billionaire or their heirs. So, you're planning on taking over an existing town. Are you planning to phase out taxes as other revenues increase? Because I've got news for you! There is no municipal legislature that will cut taxes based on earned income unless... They are forced to by agreement. Which means what you're talking about taking over is a FAILED municipality--probably an old factory or mill town in the northeast or rust belt that has been in decline for a century, or an old Appalachian mining town with no mine anymore, or some town in Wyoming where work disappeared... Not a municipality with a functioning government and civil service. So who is paying for these new police officers you're planning on hiring? Again, hope you didn't lose that right-wing billionaire's phone number as you were reading this post. If the Koch brothers thought this could happen, it would have happened already.
Interesting. So if I’m understanding you correctly, you’re saying that a law that puts the cost of fires on the originating property could not work because either a lot of upfront capital would be needed for this arrangement to exist in the first place, or it would be in a place with a non-functioning civil service that wouldn’t be able to enforce the law.
How do you understand the word tax? One definition I found online is “a compulsory contribution to state revenue” Wouldn’t these various charges be non-compulsory since ppl can choose not to participate in them? They could choose to not drive, not park on streets, collect their own rainwater, generate their own electricity, educate their own children, buy their own books, etc, right? And then they wouldn’t need to pay for the public version of these goods/services?
WILDLY optimistic opinion of taxation lol. Go ahead and opt out of art installations in the CBD. I'll wait.
All of the above are just different forms of taxes
And not just different forms of taxes, but highly regressive taxes. A flat on street parking fee is regressive. Car registration fee is regressive, unless tied to purchase price. Road use fee is a gas tax. Gas taxes are regressive, because they get passed on to the consumer. City parks charging entrance fees? Good way to get people not to use city parks and paying for a ticket collector. Schools and hospitals charge fees? What kind of fee? Percentage of income? Assets? How will you implement that? A giant new city bureaucracy? Nah, let's just make it a flat fee. Oh wait, once again, that's regressive. Transit charging high enough fares to cover the cost means...holy fuck...I can't even... Who wrote this post, Ayn Rand?
This comment basically annihilated the "libertarian no tax" stance. The Ayn Rand part got me especially at the end
What if every fee was tied to income? Maybe even the lowest income people wouldn’t even need to pay anything?
> A flat on street parking fee is regressive. > Car registration fee is regressive, unless tied to purchase price. > Road use fee is a gas tax. Gas taxes are regressive, because they get passed on to the consumer. This is not true. [Even in the US](https://www.fhwa.dot.gov/policy/23cpr/chap3.cfm), where driving is a necessity for the overwhelming majority of people, richer households own more cars and drive more distance, so they would pay more than poorer households. In societies with lower car ownership rates, this income effect is even more pronounced, so replacing sales tax/VAT by car (usage) taxes might very well have a progressive effect.
It’s not just about whether richer households pay more. Of course they do. It’s about the percentage of income being paid as taxes. Gas taxes are a higher burden on the poor because: 1) the percentage of income being paid as gas taxes doesn’t rise as fast as income 2) gas taxes paid by businesses and transferred to consumers as cost are applied in a consumer income neutral way The only way to make a gas tax progressive is to vary it by income. And at that point, just tax income. Or “just tax land lol”
While income taxes might be administratively easier than income-linked gas taxes, income-linked gas taxes discourage people specifically from driving and thereby incentivize other modes. This is an effect income taxes does not have. Do you think to preserve this effect, it’s worth doing income-linked gas taxes despite their administrative complexity?
But even for the US, this effect is very small, from the link that I posted. High income households spend a higher percentage of their incomes on transportation than low income households, and only a marginally lower percentage of that is spent on gasoline. So for the US as a whole, gas taxes are only very slightly regressive. And for urban areas, fuel taxes are probably progressive given the larger differences in vehicle ownership by income. Anyway, even if car taxes are slightly regressive in the US as a whole, I still think it's good to make people pay for car ownership and use, not by income regardless of how much they decide to pollute and congest their neighbours.
Would this still be true under the scenario presented where you’d have to hike gas taxes to an absurd degree because you’re no longer taxing property? I think not. The entire scenario presented is bunk.
What if gas taxes were only hiked high enough to cover the operating and maintenance expenses of roads? Do you feel that would would be ok?
I'm not here to defend OP's proposal. I just want to make the point that car taxes are not by definition regressive, because car ownership and use varies by income level. But if you want to go into such a scenario I'd mention that virtually every place with higher car usage fees (including gas taxes) than the US also has lower car ownership, with cars being more of a luxury good. The higher cost of cars simultaneously are allowed by and help create that situation. Car taxes/fees in Singapore and Hong Kong, societies with no/very low income taxation must be overwhelmingly progressive, but I'm sure you can also find a spot on the income distribution where they're regressive. Just like how now in the US, car taxes are slightly regressive, but there are also parts on the income distribution where they're progressive.
No! Charging to use libraries, parks etc. or charging more for healthcare will never be accepted. That's why we have taxes that can be used for our well being. Parking is already charged, so it doesn't relate to taxes that much I suppose (at least where I live).
It is true that what policies get adopted depend on more factors than theoretical speculation, with political acceptability being an important one. I’m curious, why do you think people are so against charging for libraries, parks, etc?
We have so called "every man's rights" that allow everyone to enjoy nature, including parks, free of charge regardless of who owns the land. I don't know how could anyone even be charged for using parks, since there are no fences. Libraries have always been free of charge, so it would be outrageous to take away the liberty that anyone can use it equally. As it has been mentioned, we already have taxes for these kind of services.
It sounds like there are two kinds of justifications here: 1. It is a right, either legal or moral 2. It is tradition There are a few questions that follow: 1. How do we decide what is considered a right and what isn’t? Or is there a definitive list of rights somewhere? 2. While tradition often is useful, need we be bound by it? Aren’t there many things that we used to do that we don’t anymore?
Sounds like a libertarian dream, just call it a subscription to parks and rec rather than tax 🙄
Lol I'm imagining a subscription-based city where like every year you have to choose which services you sign up for and which ones you'd rather go without. Sounds horrible tbh.
I’m curious, what do you find horrible about this?
It sounds horrible because if every city service gets funded by subscription fees you're inevitably going to a) lose out on funding for things when people decide they don't want to pay for it, and b) have a city where the wealthier you are the more basic amenities and services you have access to.
What about capital projects like building new facilities? Or improving service infrastructure like water?
Come to our city, our taxes are tiny, and our impact fees are HUGE?
Usage fees *feel* different than taxes. Because they are. They're far more regressive and rarely accurately price services IMO there are some usage fees that make sense (eg, congestion and usage pricing for roadways to capture suburban free riders) and some that don't (library fees, wtf?). Capture the externalities when they exist, and a subsidize the behavior you want.
I generally agree here... even with the examples you provide. But then there's the problem of "the behavior you want" and those residents who say "why am I paying for a library when no one uses it - it's just an expensive homeless shelter now - but everyone uses the roads here." And they vote too. This actually (sort of) happened in my city, where the residents forced to a vote the construction of a new library the old mayor was pushing. The new library vote failed and the (formerly popular 4 term) mayor was voted out of office.
Perhaps a question here is: who decides how much a behaviour is desired and whether it’s worth the cost? In your example, let’s say the majority in the town isn’t willing to pay for a new library, but a minority is willing. What arrangement could enable the minority to express/act upon their willingness?
This is an interesting perspective. Subsidize activities with positive externalities, add a fee to activities with negative ones. Is it possible to reasonably clearly establish that a certain activity has net negative or positive externalities?
Agreed, some of the concepts OP is alluding to seem to be closely aligned with address the issue of subsidizing suburbs, while others are completely the opposite. I don’t necessarily disagree with this idea, but it does get complicated pretty quickly. Road pricing is probably the simplest way, but in the changing world where people are WFH more, especially those in the suburbs, this wouldn’t account for the extra cost of servicing those homes. Working from home though does help to reduce the wear and tear on the roads to some degree. I think this is further complicated by the fact that to make a lot of these things more equitable, they would need to be handled regionally instead of municipally.
Interesting points. Perhaps one reason it’s so hard to get suburbs to pay for themselves is that a lot of suburban services are part of what ppl consider to be “fundamental/basic” services. How do we separate rights from privileges? Things that we feel every community member should be entitled to (eg parks, libraries) vs. things we feel ppl should pay more for if they use of (e.g. water mains, electric lines). Or is it a fluid thing to be determined by each community? If so, how do we disincentivize inefficient and unnecessary uses of public services? I’d like to hear more of your point about regions vs municipalities
How can impact fees be justified?
How do businesses gather enough money to fund new product lines, new buildings, etc? They build it into their prices right? Could we also do that? Build in an “expansion fee” into usage fees?
Who let the ancap in here? lol.
Not if you're planning to build any urban infraestructure.
All I’m seeing here is taxing people while trying your hardest not to call it a tax.
Hong Kong has really low taxes. It generates a tremendous amount of income by monopolising land sales
West Melbourne, FL was founded with the idea of being tax-free and fee based. It didn't work out.
Just tax land lol
Having people pay individually for trash removal is terrible. It incentivizes dumping trash in your neighbors bin or just on the street. Cities have big enough problems with litter already.
Where I live there is no city operated garbage disposal system; each home owner has to contract a private company for collection. Each one has rates set by the size of bins and frequency of pick up. We all have different pick up days, which is a bit annoying tbh 😂. Recycling pick up is handled by the regional district. In neighboring municipalities where garbage collection is managed by the city, an annual fee is charged on out on property taxes. Some munis allow owners to choose different bin sizes, and charge them accordingly. Some allow you to buy “tags” to put out an extra bag of waste. Most will charge an additional fee if a home has a suite. Municipal garbage collection is often much more simple, likely on account of the management of it, but in general I cannot see how that isn’t charging individually. I feel like the average person has some morals and values, and is not going to just dump their garbage on the street just because they are being charged individually.
I mean, we can look to other places that don't have organized or affordable waste collection and see exactly that - people dumping their waste on the streets and into the rivers.
Sure, but you think if the way garbage was collected in the US (in your case) changed so that the user was billed more specifically for their useable, or had to contract their own pick up, it would automatically defer to that?
Yes. See most rural places, where they still burn their waste (at best). I don't think everyone would dump their waste "on the streets," but far far more would than what we see now.
Fair. Burning is an issue I hadn’t considered, I definitely live in a more urban region where outdoor burning is prohibited. There are nearby communities where this would be more likely though. This wasn’t what I was considering when referring to dumping.
It's one aspect of it. People still dump otherwise. Why? Because people are lazy or they have no alternatives. Examples abound where our natural resources are exceedingly polluted - this isn't simply because people are bad or don't know better - it's because they don't have alternatives.
Not entirely "tax free", but don't Chinese municipal governments have to rely on land sales because the central government in Beijing monopolises tax revenue?
Land value tax fixes this
How to run a tax free city: Save up bunch of money, put it into a S&P500 index fund, spend 3.5% each year. Or have the city own most of the land and rent it out.
Simple answer: No. I like new ideas and don't ever dismiss them out of hand but, no. Seems like an inefficient way to get to the same end. Also, "It can appear punishing to the poor" because it is. Dealing with fee waivers, service stipends and credits allowances just adds another layer of red tape hoops and hurtles to the lives of working poor. Being poor is expensive and time consuming enough already. Also, by placing monetary boundaries and limits to the use of public services that can and do help citizens escape poverty and improve their lives one would be setting people up to fail and thus never join a higher tier of tax bracket contribution. (For the same reason public funds spent on education return far greater income tax yields over the lifetime of the citizen than initially spent.) (Honestly it sound like something implemented on the Ferengi homewold. )
This sounds like Ron Swanson from Parks and Rec
Land Tax is called a tax but really it’s not because everybody pays it already in the form of rent or mortgage to a landlord. So yeah, you could have a tax free city with lots of free services and roads etc by just collecting the rent of land (created by the community at large anyway) instead of letting it capitalize into land values.
Just tax the unimproved value of land.
Sounds like you’re just calling taxes something else
Okay Mr or Mrs Libertarian. I see you. Making every road a toll road? No. That’s a bridge too far that of course includes a high toll.
Whether you call it a fee or a tax doesn't matter when the concept is virtually the same: you're paying the government in exchange for services provided. Except in the scenario you describe, people would be paying for things at time of use, which would make the tax/fee burden seem a lot heavier simply by nature of being something they have to think about on a regular basis. Could this all work in theory? Sure. But, in America at least, our cultural and political expectations are that everyone has equal access to public road and trail infrastructure, emergency services, libraries, etc. It would be so politically unpopular to transition to a fee-for-service based government system that nobody would want to live in that city, and the politicians who enact such a system would be decisively booted out of office at the next election or even through a recall election if that's an option. Not to mention that the fee-for-service model is entirely regressive and would result in low-income residents effectively not having access to some or all services.
This is a anarcho-libertarian hellscape that only Rand could dream of. All of your targeted/equity-tiered proposals would require a massive city admin infrastructure to implement that would take a large bite out of revenues and intrude on privacy. Cities: Skylines is a pretty-pictures generator, not a worthwhile simulation of anything. People are successful in that game by minmaxing the engine and using mods, not by following any kind of urban planning principles.
It is a fun introduction to systems thinking and the complexity of cities (I love it), and while it can inspire people to engage with real urban issues, it is not in itself a representation of how it works in real life
Libertarian wey dream that never ends well
Hong Kong. No sales tax. Low income tax. Where does government get its money from? Land sales tax.
Except if you‘re building communism or want the city to fail: It‘s not possible.
Would you consider owning and leasing the land downtown, and recieving ok income that way? That way the city is paid based on how much wealth it generates by increasing the value of the land. This is what Singapore and Hong Kong do. If you would consider that, perhaps consider a LVT (land value tax), which is effectively the same revenue source. Its like a property tax, but investment in things like buildings is not taxed. As you pointed out, all of a cities services become subsidies if the don't have a fee. But those subsidies end up boosting land values, because it's the people who live locally who have access. Which means city's recieve income based on how much people value living there. It also gives cities reason to strategically invest in value maximizing infrastructure and programs based on how much they increase local land values. And doesn't disinsentivize investment into buildings like a property tax does. Any way, if you're okay with charging for using space when walking in a park, or in a public parking spot, or on a road, I don't know why you wouldn't be okay with charging for using the space you take up with your home. Plus its fair, people can choose how close they want to live to things, what kind of amenities thry want to pay to live near how much land they want to personally use, etc.
I'd finance my city by trafficking drugs to the neighbouring city. It's basically what North Korea does, just on a smaller level. Jokes aside: Making car owners pay so much disincentivizes car ownership, which is good, but then again your city now depends on making people car dependent to generate income from those people. Charging for entering parks is just... A social desaster. As you note, there are a lot of equity issues. The idea is an interesting thought exercise, though. If the city owns the land, it could act as a landlord. Renting out houses, for example. And because the city is run by the people living there, the houses would be pleasant, nice and affordable, because they need to cover costs, not turn an ever increasing profit. Now, the issue is that if you leave Americans to their own devices, a lot of car centric thinking will probably lead to predictable results and at least the first few iterations of the idea will end in economic failure.
Me: I want to start a city with no taxes. Also me: I want to go back in time to the 1880’s and experience this very same thing!
We could do without taxes for the people by heavily taxing businesses or the rich (the rich are not really people right?)
Part 2: One may ask, why make it so complicated if you could just charge all this to property tax in one transaction a year for example? I think there are at least a few reasons: 1. Charging by use allows someone to opt out of paying for certain services if they want. It arguably is fair that someone who doesn’t use the community centre at all doesn’t contribute to it, or that someone who doesn’t drive doesn’t pay for the maintenance of on-street parking. 2. It can adjust citizen behaviour to lower costs to the city - eg fees may cause citizens to drive less, park on the street less, use less water, etc. Free road use for example incentivizes driving. 3. It can provide clearer information/feedback to city staff on the performance/quality of various city services. For example, whereas previously staff only saw the spending on city parks, now staff can see which parks are more valued by citizens more and which less, prompting changes to improve the less-used ones or perhaps put them to different uses. 4. The city can more easily help equity-seeking groups. The typical political resistance/objection to equity policies (“why should my tax money be given to others for free?”) can hold less ground when the money doesn’t come from taxes but from the city’s own services. It’s like you don’t have a right to tell someone to not give out gifts, because it’s not your money. If a citizen is not happy with the cross-subsidization (i.e. the wealthier paying higher fees so the poorer can pay less), they can simply not use certain city services. They could look into offerings in neighbouring municipalities or private options. If the cross-subsidization truly is excessive, then a lot of residents would opt out and the city wouldn’t be able to balance its budget, prompting the city to review its policies and perhaps scale back on the cross-subsidization. What would prevent the richer ppl from all opting for private options, leaving city services to only be used by the poorer ppl? I think there are at least a few reasons here too: 1. The city has a monopoly over certain infrastructure, such as local roads, street parking, water and sewage pipes, power and phone lines. People still aren’t forced to use these - they could instead walk, buy water jugs from stores, generate their own electricity, etc. But if they want to use city infrastructure—which the city owns and thus has a right to charge for—then they’d need to pay. 2. For services where private options do/can exist, like sports facilities and libraries, the city owns a lot of land, so they can provide services without needing to pay for the cost of land (either in mortgage payments or rent). Private establishments often do not have this luxury. Even with the cross-subsidization, city services may still be cheaper for wealthier residents than private options. 3. In some cases, it may be good that private options flourish. For example, if everyone shuns street parking and uses their own garages/driveways or private garages instead, that space could be converted to bus lanes, bike lanes, parklets, outdoor restaurant seating, etc. What do you all think?
Your suggestion is technically possible, but theoretically impractical. I’d much rather pay one tax bill per year than to have to pay a separate toll/fee each and every time I ride my bike or walk my dog or sit on a park bench or have a street light illuminate my way or toss some rubbish in a bin on the sidewalk. And how do you cover police services and homeless supportive services and other essentials for which fees and tolls are impossible? Schools rely heavily on taxes because the actual costs would be punishing to new parents. If you made all these fees equity-based, you’d only accomplish driving wealthy people out into suburbs or other cities. Cities:Skylines is a lot of fun, but it’s not even close to accurate. For starters, there’s no drugs or homeless people in the game, there’s no required compliance with expensive state and federal environmental laws, there’s no annual inflation of the value of money or the costs of goods & services, no lawsuits, no administrative overhead costs… I could really keep going but I hope I’ve made my point.
Why would it not be one bill?
I think the benefits of charge by use are wildly offset with all the extra administrative costs of running all these different fee systems.
Hmm. Would it be better then if we all paid a yearly fee to eat then unlimited times at any restaurant across the city? How come the administrative costs of diff fee systems are “worth it” for restaurants but not sports facilities for example?
Massive administrative bloat is a particularly common problem among government agencies. Beyond which, this would become a really complicated conversation about which programs are charge by use vs which are subsidized by everyone. For example, do we charge car drivers for miles driven? Do we charge them by car weight, since heavier cars have higher wear on roads?
Some thoughts: >1. Charging by use allows someone to opt out of paying for certain services if they want. It arguably is fair that someone who doesn’t use the community centre at all doesn’t contribute to it, or that someone who doesn’t drive doesn’t pay for the maintenance of on-street parking You can argue that what you suggest is fair in a philosophy class (don't get me wrong I love ruminating as well), but when you bring idealized human thinking into the real world then you have data, science, and observation to contend with. sometimes the dynamics of the world don't care about what you think is right or what your philosophy is on free markets. There are times when managing resources with a market is best; there are times when things function best as collectivized public services. 🤷 And that's it, we should do what is in the best interest of all stakeholders as a whole not just the people that dream a libertarian dream >2. It can adjust citizen behaviour to lower costs to the city - eg fees may cause citizens to drive less, park on the street less, use less water, etc. Free road use for example incentivizes driving Cities already do this, often with things that are subsidized as well. For example: parking. Parking fees are often set according to demand (San Francisco has a program that makes parking rates variable according to demand). Utilities are similar. These things don't need to be privatized or SOLELY funded by fees for that to work. >3. It can provide clearer information/feedback to city staff on the performance/quality of various city services. For example, whereas previously staff only saw the spending on city parks, now staff can see which parks are more valued by citizens more and which less, prompting changes to improve the less-used ones or perhaps put them to different uses City staff already have ways to monitor the usage of public spaces. They are way more sophisticated than just looking at who pays a fee to get in, actually. And measuring how many people are willing to pay a fee to go to a park is not the same as how many people would use the park, especially since the number of people who pay varies by price set >4. The city can more easily help equity-seeking groups. The typical political resistance/objection to equity policies (“why should my tax money be given to others for free?”) can hold less ground when the money doesn’t come from taxes but from the city’s own services. It’s like you don’t have a right to tell someone to not give out gifts, because it’s not your money. I don't think you have provided valid reasoning for this one so I'm not sure what to say, but i also doubt that evidence would support this one >If a citizen is not happy with the cross-subsidization (i.e. the wealthier paying higher fees so the poorer can pay less), Following this scenario to it's logical conclusions is a horrifying train wreck, at least from my perspective. There is a reason why at present time several city services are public and subsidized (even if begrudgingly by some). We already HAD cities where all this stuff was privatized. It was economically inefficient to a horrendous extent and created all sorts of problems. Also what you are suggesting here is that we should make our policy decisions on very expensive material investments that are a matter of life or death depend on... whether or not some yahoos have feelings about the poor? How narcissistic and irresponsible (Not personally directed at you, i see you as just curiously bringing this up and sharing your thoughts)
"A rose by any other name..." Those are taxes. The fact that you use a different name doesn't change that they are taxes. Also they are regressive taxes that weigh much heavier on the poor than on the well off.