Sunday, January 29, 2006
How to Rehabilitate a City with No Tax Cost
I wrote the following about how what the followers of Henry George call "site value taxation" could re-vitalize cities a long time ago for the Chicago Tribune.
In a sentence,
The late Weld Carter of Fox Lake taught me more about Henry George's theories. Carter was Thomas Edison's mathematician until Edison rejected a finding that did not agree with his preconceived answer. He contacted me when he saw I was interested in proeprty taxation.
My column was re-printed by Chicago Georgists in 2002.
Shift the Property Tax
This guest editorial originally appeared way back in 1979. The politicians did not take the author's advice, so cities such as Chicago have deteriorated. Now the author is running for Governor of Illinois. His recommendations are even more on-target now. See for yourself.
How to Rehabilitate a City with No Tax Cost
by Cal Skinner, Jr.
The primaries are over. Everyone has paid lip service to "the neighborhoods." With Sandburg Village going condo, more people have started talking about rehabilitating existing apartment buildings in Chicago.
The mayor and city council have used municipal bonds to provide lower than market interest mortgages to home and condo purchasers. Of course, we all will help pay for that subsidy through our federal income taxes.
No one but me is likely to suggest that there may be a way to save Chicago's neighborhoods at no cost to the taxpayer: a simple change in the real estate tax.
Right now, the real estate tax encourages apartment owners to let their buildings deteriorate. If an owner invests rent receipts to improve the buildings, the tax assessor is mandated by law to increase the building's tax assessment. That, of course, results in a higher tax bill.
There are even charges that some arson results from apartment owners wanting to collect insurance money and cut real estate taxes.
So what shall we do?
For the rest of the column, click here.
In a sentence,
American economist Henry George promoted the taxation of land, not buildings, as a way to stimulate the optimal use of land.Unfortunatley, the system of property taxation was so well established by the time he came up with the idea that very few parts of the country have adopted his idea. I read about him in my first economics class in the "Worldly Philosophers" by Robert Heilbroner. Henry George was the only American in the book.
The late Weld Carter of Fox Lake taught me more about Henry George's theories. Carter was Thomas Edison's mathematician until Edison rejected a finding that did not agree with his preconceived answer. He contacted me when he saw I was interested in proeprty taxation.
My column was re-printed by Chicago Georgists in 2002.
Shift the Property Tax
This guest editorial originally appeared way back in 1979. The politicians did not take the author's advice, so cities such as Chicago have deteriorated. Now the author is running for Governor of Illinois. His recommendations are even more on-target now. See for yourself.
How to Rehabilitate a City with No Tax Cost
by Cal Skinner, Jr.
The primaries are over. Everyone has paid lip service to "the neighborhoods." With Sandburg Village going condo, more people have started talking about rehabilitating existing apartment buildings in Chicago.
The mayor and city council have used municipal bonds to provide lower than market interest mortgages to home and condo purchasers. Of course, we all will help pay for that subsidy through our federal income taxes.
No one but me is likely to suggest that there may be a way to save Chicago's neighborhoods at no cost to the taxpayer: a simple change in the real estate tax.
Right now, the real estate tax encourages apartment owners to let their buildings deteriorate. If an owner invests rent receipts to improve the buildings, the tax assessor is mandated by law to increase the building's tax assessment. That, of course, results in a higher tax bill.
There are even charges that some arson results from apartment owners wanting to collect insurance money and cut real estate taxes.
So what shall we do?
For the rest of the column, click here.
