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by pzh
3065 days ago
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> But I can't negotiate with those places to get a special tax rate just for me. There is no "Dan's tax rate" that is different from everyone elses. That’s only because your tax contribution is very small and you don’t have leverage. If 60% of the residents of a city leave, you can bet the city will quickly lower or remove taxes to try to attract more people. |
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That's exactly right. E.g. Michigan has designated NEZ zones[1] offering tax breaks (e.g. sometimes half the tax rate) to attract potential homeowners to distressed neighborhoods like inner city Detroit.
Sure, residents in another wealthy city (like Bloomfield Hills) in Michigan might complain they don't get the same tax subsidies as downtown Detroit but it still doesn't change the fact that governments will offer tax incentives for certain people (not just companies) to justify a desired economic outcome.
Detroit has to make those tax concessions because residents are fleeing and the city suffers from a lower tax base. The more desirable cities like San Francisco don't have to make the same tax concessions.
(I make no comment on whether NEZ actually works as intended or whether it is a net positive economically.)
http://www.detroitnews.com/story/opinion/2016/06/22/detroit-...