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Twisted Logic

It is understandable that some people are concerned about state and local governments selling government owned (i.e. commons) property to private companies and investors. Recent examples include roads in Chicago and proposals to sell the Golden Gate Bridge and other properties. While I believe these deals make a great deal of economic sense, and will ultimately provide consumers with better quality and more innovation, some people worry that poor and middle-class Americans will somehow be damaged by these sales.

In “Free Lunch”, David Cay Johnston writes about the horrors of these privatizations, but does not seem to include any data or facts to demonstrate how these people will be damaged. The best he can come up with to oppose the privatizations is that the sales of roads and bridges and other properties to private investors usually comes along with tax breaks for doing so. And that these tax breaks are yet another assault on local and state tax revenues to benefit the rich while hurting the poor. Pardon me for my extreme ignorance, but do government highway authorities and bridge and tunnel authorities and parks offices pay property and income taxes to states and municipalities? I hardly imagine so. There may be legiitmate concerns against privatization, but to use the loss of property tax revenues as the major defining negative, the case seems to me to be extremely weak. These positions do not seem to be based on any real notion of economic efficiency, or even fairness for that matter, but simply by some people’s distaste for anything private, and preference for all things public.

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