Columbus, Ohio's Income Tax (Part 2)

Indiana’s cities rely on property taxes. When the housing bubble burst they had their own little tax debacle over assessments. See more in The Indianapolis Star.

Ohio’s cities rely on income taxes. Unlike property taxes - paid rain or shine, receipts dented only in cases of tax delinquency - when unemployment rises, tax receipts fall. Instantly. No liens; nothing delinquent.

Many Ohio cities seek jobs above all else. There are more than a few that used to rely heavily on an estate tax, but changes to state law have made that avenue less lucrative. But how, exactly, does a government grow new jobs?

That’s a big enough debate on it’s own. My point is this: as badly as I’d like to see great city services remain in place, as much as I’d love our Columbus neighborhoods to thrive, there’s negligible return. There’s no fiscal feedback loop in place. The only feedback from improved, or at least maintained city service levels might be some love from the electorate and maybe fewer complaints directed at city hall.

Folks can vote for or against the tax increase, they can vote with their feet and move off to the suburbs, but as long as they keep coming to work in Columbus it hardly affects the bottom line.

Update on Wednesday, July 1, 2009 at 11:54 AM by Andy Taylor

Some local bloggers met with Mayor Coleman last Thursday to talk about the income tax increase. They’ve generously posted the audio from their meeting.

Jacobs on "Families Rigged to Fail"

I’ll probably spend a fair bit of time on the first threatened pillar of our culture that Jacobs tackles: family and community, despite this admission:

Most of my observations on North American community loss and other subjects are not news to anyone who takes an interest in the conundrums of our time and is reasonably well fortified against amnesia. “Families Rigged to Fail” Dark Age Ahead (p42)

It’s the narrative by which she weaves these observations together that is so compelling.

And prescient.

Families need communities. With strains on our time and our finances, we’ve rigged our families to fail. The current economic crisis is only the most recent riptide affecting our way of life. Familes are the basic economic unit. We’ve rigged them to fail.

You can’t focus on one issue to figure this out. Jacobs brings in streetcars, ancient Rome, the cost of housing, reliance on the automobile, and more. You can’t just focus on the family.

*

Jacobs remains pithy in her rhetoric here, referring to anyone “reasonably well fortified against amnesia.” Who, reading that, would count themselves out?

Next Up: Dark Age Ahead (part 1)

Dark Age Ahead, Published 2004

What did Jane Jacobs know?

Today and tomorrow I’m offering a little preview of the next Jane Jacobs book on the docket: Dark Age Ahead. Expect more in June. Heretofore, I’ve yet to read this one—or any work of hers other than The Death and Life of Great American Cities. I plan on milking the latter out over the whole year, offering up a look at one of her other works every other month.

Dark Age Ahead, is Jacobs’ last published book. It appears rather prescient and relevant, which is why I’ve bumped it to the top of the list.

Some people think optimistically that if things get bad enough, they will get better because of the reaction of beneficent pendulums. When a culture is working wholesomely, beneficent pendulum swings—effective feedback—do occur. Corrective stabilization is one of the greatest services of democracy, with its feedback to rulers from the protesting and voting public. “The Hazard,” Dark Age Ahead (p21)

Commercial markets also offer this kind of “effective feedback” as individuals and corporations succeed or fail.

But powerful persons and groups that find it in their interest to prevent adaptive corrections have many ways of thwarting self-organizing stabilizers—through deliberately contrived subsidies and monopolies, for example. “The Hazard,” Dark Age Ahead (p21)

Think of the current outrage over the lobbying efforts by banks and companies deemed “too big to fail” (US Treasury Secretary Geithner, among others) and the now ongoing debate over market re-regulation in the US.

Treasury hopes to get us out of the mess by replicating the flawed system that the private sector used to bring the world crashing down, with a proposal marked by overleveraging in the public sector, excessive complexity, poor incentives and a lack of transparency.

Let’s take a moment to remember what caused this mess in the first place. Banks got themselves, and our economy, into trouble by overleveraging — that is, using relatively little capital of their own, they borrowed heavily to buy extremely risky real estate assets. In the process, they used overly complex instruments like collateralized debt obligations. “Obama’s Ersatz Capitalism,” Joseph Stiglitz, New York Times, 31-Mar

Jacobs also describes a sort of sub-conscious cultural drift that has the same effect as a deliberate effort to thwart self-organizing stabilizers. This could apply to our collective delusion (i.e. housing prices will always go up) that contributed to the housing bubble. This delusion could also apply to the policymakers themselves who believed they had tamed the business cycle.

Jacobs, self-trained in observation and economics, sees this feedback as a critical link the the processes by which our culture adapts and proceeds.

I wonder what else she’s observed about the age ahead?