Thursday, April 13, 2006

Tax rankings and caps, how France is like zoning, and "Houston-style" zoning

Another accumulation of miscellaneous minor items.
  • The U.S. Census Bureau ranks Texas second-lowest for taxes per capita (although a solid fourth-largest in total dollars), and yet somehow everyone's whining about excessive property taxes.
  • Speaking of property taxes, I enjoyed the recent Chronicle article covering the dangers of tax caps. Texas should take careful note. I've written on the risks several times before, particularly noting the California case study (more here) and the massive problems there. This article focuses on Florida. An excerpt:

A warning from Florida

But Fred Brummer, a Republican legislative leader in Florida and outspoken critic of that state's low appraisal cap, warned against "folks in the state of Texas ... following us down the road to ruin."

Brummer said a 3 percent annual cap on increases in home values adopted by Florida voters in 1992 has provided many homeowners with lower taxes but also has transferred much of the burden of paying for government "from the wealthy to the not-so-wealthy."

...

Reported complications

The Sarasota (Fla.) Herald-Tribune reported last September that Save Our Homes had prevented many people from being forced out of their homes by ever-increasing taxes.

But it also noted that the amendment had "disproportionately shifted the burden of supporting local government ... to snowbirds and businesses and landlords," who have seen their taxes soar.

"It transformed a system that made sense — where the most valuable property got taxed highest — into a snarl of inequities ... Millionaires in mansions on the water pay the same taxes as middle-class families in cookie-cutter subdivisions," the newspaper added.

It cited examples of neighbors with markedly different tax bills on similar houses, simply because one owner had lived in his house for years and the other only recently had moved in.

The newspaper also reported that apartment owners and their tenants were being squeezed by higher taxes, and that many small businesses were being taxed out of existence.

And many Floridians who want to sell their homes can't afford to move, because they would lose their tax breaks and see their taxes on new houses mushroom.

(for a better solution, go here)

"The regulatory welfare state effectively politicizes all aspects of the economy, making entrepreneurship and dynamism almost impossible.

The same effects can be seen in local communities in America where zoning and urban planning has created the illusion of security and stability. So-called community "visioning", combined with a host of strict regulatory controls on land use, create static places that are resistant to the changes necessary to make them competitive and adaptable in a dynamic environment."

Well, I would submit that urban Houston has a particular style of zoning that works rather efficiently.

We frequently run stories about conflicts over commercial encroachment into inner-city residential neighborhoods.

Near downtown, well-heeled homeowners posted lawn signs protesting a planned dental clinic.

Out southwest, a civic group stalled construction of a hospital expansion.

Up the Loop, outcry from a single-family community threw up a roadblock to development of an apartment complex.

These are just three examples from recent months. Hundreds of such confrontations, most unreported, have taken place and continue to unfold since zoning was zapped nearly two decades ago.

In most cases, a resolution is reached through a process of compromise and accommodation.

It usually goes like this. One elected official, a city council member representing the district, brings parties to the table. After some give and take, an agreement is reached without input from a downtown cabal of zone-meisters.

While the system may not be perfect (and what zoning system is?) this grassroots approach to development seems to work as often as not in "The only major U.S. city without zoning."

Let me say an official "Huzzah!" to that.

9 Comments:

At 8:27 PM, April 13, 2006, Anonymous RJ said...

"The same effects can be seen in local communities in America where zoning and urban planning has created the illusion of security and stability. So-called community "visioning", combined with a host of strict regulatory controls on land use, create static places that are resistant to the changes necessary to make them competitive and adaptable in a dynamic environment."

Ummm... The Woodlands is a place created by such visioning, with strict regulatory controls on land... is that like France (in a negative sense)? Is it a static place? Is it not competitive?

 
At 8:20 AM, April 14, 2006, Blogger John Whiteside said...

Two observations:

1. Everyone complains about taxes everywhere no matter what the actual tax rate is. It's human nature. When I lived in DC, all my Virginian coworkers complained bitterly about "all those taxes" even though they were significantly lower than what those of us in DC and Maryland paid. There is no logic to this.

2. As much as Americans like to talk about France as a semi-socialist wreck, we tend to overstate this dramatically. Yep, France has plenty of problems.

On the other hand, as the Economist recently noted, profits for their top 40 companies were up 50% last year, and French companies were behind an enormous number of corporate takeovers, they're aggressively taking advantage of globalization to spread into new markets, and generally behaving as you'd expect the corporate sector in one of the world's richest countries to behave. Hardly a "static" or "uncompetitive" place.

Beware of what "everyone knows" about France because it's often just not so.

 
At 10:44 AM, April 15, 2006, Anonymous Brian S. said...

Re: France.

John is right. France's economy isn't all bad. Their growth rate is superior to Germany's as is their unemployement rate (10% vs. 12%). France typically grows in the 1.5 to 2% range which isn't great, but not catestrophic. Unfortunately, their market interferance has led to social unrest which makes them stick out from others.

Japan has more problems than France. They've recently had some good economic signs, but imagine living in an economy that had virtually no growth from 1991-2004. They specialize in company protection and not job protection so their unemployment rate typically hovers around 4% even with the bad economic growth.

France's problems are long term. The differential can seem small in growth rates, but in 35 years a growth rate of 3.5% as opposed to 1.5% will mean that a place like Australia will have twice the per capita income of France while they are vaguely similar now. It doesn't mean that France is screwed just destined for irrelevance. We also need to hope that recent violence there isn't an upward sloping trend. Villepin's attempt was a good one to fix problems in youth unemployment in France and it got shut down. C'est la querre.

 
At 11:05 AM, April 15, 2006, Anonymous Anonymous said...

John said
"as the Economist recently noted, profits for their top 40 companies were up 50% last year, and French companies were behind an enormous number of corporate takeovers, they're aggressively taking advantage of globalization to spread into new markets"

seems to me the economist mentioned that point to say that the only french companies that are growing are the ones who can operate outside of france. Nobody really thinks that french individuals are idiots, just that the way they are running their country is going drive their standard of living into the ground.

Men in Black paraphrase

"individuals are calm and intelligent, people are dumb."

 
At 2:20 PM, April 15, 2006, Anonymous pot and kettle said...

-- Nobody really thinks that french individuals are idiots, just that the way they are running their country is going drive their standard of living into the ground. --

of course, we're about 9 TRILLION dollars in debt at the federal level. We are in no position to criticize.

 
At 8:50 AM, April 16, 2006, Blogger Tory Gattis said...

In an email exchange, Mack Fowler has pointed out to me that, when you look at the details, it doesn't look like city/county/school property taxes are included - they may be comparing state govt revenues only - which would make my comment unfair about people complaining about property taxes. My apologies for the misunderstanding.

http://www.census.gov/govs/statetax/

 
At 9:20 AM, April 16, 2006, Blogger John Whiteside said...

Just to clarify, I'm not suggesting that France is a capitalist wonderland, just that it's hardly the mess that some in the US like to say it is.

Their labor laws are a problem, but I really question the assumption that they are the biggest cause of the unemployment. As others have noticed, countries with similar approaches often have lower unemployment rates and countries with looser laws sometimes have unemployment just as bad. The larger problem is that they've got a very idealistic idea about state responsibility to citizens, and it's damn expensive to maintain.

Of course, our "no responsibility" approach has its own set of problems.

 
At 9:55 AM, April 16, 2006, Anonymous RedScare said...

This is also not an apples to apples comparison. As one might expect, France's definition of unemployed is much more liberal than the United States. The US calls one "employed" if they have worked ONE HOUR per week the last 4 weeks, while France considers one "unemployed" if they have not worked 78 hours in the previous month.

This disparity causes France to have an apparent high unemployment, compared to the US. How much difference? The US claims 7 million unemployed for March 2006, but it would be 12.5 million, if calculated the way France does, or 8.3% unemployed, versus France's 9.8%.

Interestingly, while the French are concerned about their unemployment rate, the US is claiming economic victory, since it's rate is invisible.

 
At 2:41 PM, April 17, 2006, Blogger John Whiteside said...

Redscare, interesting point. Is there any online source for this data, I would love to dig through it but haven't found anything.

 

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