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We’re Number Two!

As much as I hate being taxed to death, you should recognize that reporting percentages like this is highly misleading. I have a house valued at $180,000 and I pay $6000 per year in property taxes. That is still an enormous amount of money. However, from the standpoint of my residential location decisions, it’s the $6,000 that is important to me, not the percentage of my home price. Furthermore, property taxes (some of them) are capitalized into home prices. So if my rates were lower, no doubt my home price would be higher.

Sure, I would prefer to live in the latter world for moral and political reasons, but it is not clear from a strict dollars and cents standpoint that my “cost” would be much different. A terrific empirical project would be to estimate just how much various amenities and taxes are capitalized into housing prices. My point is that I do not believe that they are dollar for dollar capitalized. That should give you some sense for the “value” we perceive we are getting from public services.

Furthermore, as much as I do not support coercive taxation, here in Perinton and Pittsford where I live, there is evidence that these lavish tax amounts are used fairly well and to provide people with things they want. Our libraries are terrific. Our roads are of excellent quality – and a majority were recently repaved in such a rapid time that I had to remind myself that government actually did it. Our leaves get sucked up by town vacuums. The town picks up tree stumps and tree limbs. We have pretty facades on our stores. We have a wide variety of beautiful parks. And the public schools (here at least) seem to be run fairly well. The enormous broken window here is to assume that private companies would not provide these things at even higher quality and lower cost without the gun.

That parenthetical remark notwithstanding, I have lived in places with equally honerous nominal tax burdens, that were, quite frankly, dumps to live in. Our family really enjoys where we live.

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