[thechat] balancing old and new (was re: Knife-man found in BusinessWeek)

Matt Warden mwarden at gmail.com
Sat Nov 8 12:34:41 CST 2008


On Sat, Nov 8, 2008 at 11:31 AM, Jeremy Weiss <eccentric.one at gmail.com> wrote:
> What I think Benton County, Arkansas (county were Bentonville, and thus Wal-Mart
> HQ, are located) could have done was to find a way to protect the families that had
> been there, some sort of grandfather clause or something. For example, they could
> have only reassessed the value of a property when it was sold, that way the family
> farms would not have been effected.

Maybe, but then you are giving a huge tax discount to people just
because the house hasn't sold. This will have market side effects. For
example, if I am moving out of the area, it is now more likely that I
will try to rent the place out or subdivide my land so that I can keep
one parcel that is the "original property" and rent that out. The
ownership hasn't changed, so I still get my huge discount. But I reap
the benefits of the higher property values anyway. Government will
eventually try to legislate against this, but it will fail except to
make the legislation more complicated, resulting in only experienced
individuals benefiting and creating a new barrier to entry in the
rental market.

The situation you describe still sounds to me like the county and city
were getting a huge influx of tax revenue and decided to spend it. As
you said, property taxes increased, but probably even more so, income
tax revenue and the like would increase due to the large volume of
business conducted in the area (probably not 1-1 with the # of
workers, as many probably only work in that area and do not reside
there, but even in that case if they work there for 12 months then the
locality gets the tax revenue).

What did they do with all this wealth? I'm sure some went to
infrastructural improvements that are difficult to handle other than
by government, like water infrastructure and road infrastructure. But
my guess is that the government, as it always does, took the
opportunity to grow itself and encroach on areas where the private
sector was already solving the problem better... especially when you
have two diverse constituencies, one who may not be interested in the
services.

Every government official has his/her to-do list, and the only thing
that keeps it only partially complete is that there are limited funds
available. When funds are unlimited, it becomes much harder to argue
against individual initiatives. And, unfortunately, "give the excess
money back to the people who earned it" is usually a losing
initiative, if it's ever proposed.

The model in this country and most countries is that you do not own
your land; you lease it from the government. The implication there is
that when the community changes, you either change with it or lease
property somewhere else. You do not have any inherent right to the
land you use, except that the government must compensate you "fairly"
if it decides to kick you off of it.

The scenario you are describing is a great example why this model is
immoral. Someone else moving into the area should not affect the
amount of money I have to pay the government to use my own land.


-- 
Matt Warden
Cincinnati, OH, USA
http://mattwarden.com


This email proudly and graciously contributes to entropy.



More information about the thechat mailing list