Capitalize on Your Assets: Commuter Tax Edition

Love Jeff Warren, but I’m not sure where he’s coming from on this:

“I do not believe in the concept of a commuter tax, plain and simple,” Warren said. “I don’t believe in it. We’re going to tax individuals who never voted for us. I have a problem with that.”

Cities tax non-residents all the time. Philly and Pittsburgh have sales taxes, and if some state politicians get their way, there could be a 1% local option County sales tax. Easton would benefit enormously from that, since they’ve got a downtown retail cluster and a growing tourism sector. Lots of non-residents would be paying taxes to the city.

Parking revenue is also money that the city gets from non-residents and tourists. Nothing wrong with that. Easton and its businesses and residents have made the downtown land valuable, and people are paying to use some of that space. I’m not sure where this principle comes from that cities shouldn’t tax non-residents.

My view is that cities should capitalize on their best assets to get revenue for city services.

If your public policies (like “clean and safe”) are adding significant land value, you should tax land value. If you’re working to build an arts and tourism economy, you should tax sales and non-productive use of the most valuable land (parking, land speculation).

And if you’re the County seat, you should tax people who have to work in the city. The County doesn’t pay land taxes, but they take up a lot of land. It’s the same issue that leads you to want a PILOT from other big non-profits. They’re using land and city services, but for whatever reason they don’t have to pay land taxes to Easton. Isn’t the next best thing to charge them at least the same income tax rate as residents? If I ran the zoo, I’d charge a higher income tax rate to commuters so as to create a direct incentive to live within the city limits and save money.

(Thanks: Zach Lindsey)

Comments

  1. John says:

    To relocate out of Philly to the suburbs requires either moving to another state or at least a 20-30min drive / 1hr+ public transportation. Andnd you’ve changed your employee’s entire lives in how to get to/from work. To relocate out of Easton is 5mins driving and it doesn’t change anyone’s life at all.

    If I’m the county, I move employees out of Easton to other County facilities. Many Northampton county employees are friends of mine, and none care whether they work in downtown Easton or not.

  2. Jon Geeting says:

    I predict no one moves.

  3. John says:

    If I was located in Easton and it didn’t matter where I was located, I’d ask my employees what they thought. Their thought wouldn’t be final but it’d sure be interesting to hear what they have to say.

    You know the problem with absolutes? They’re never right.

  4. Jon Geeting says:

    The impact is going to be negligible. Most businesses and workers are going to conclude that the cost of moving isn’t worth it.

  5. GDub says:

    How many businesses are we really talking about? Lafayette, Crayola, and Weyerbacher? And the county government? They may not move, but how likely is it to actually grow?

    • Jon Geeting says:

      There aren’t that many, and also people who make below a certain amount don’t pay EIT at all. Forget if the cutoff is 25K or 30K. So we’re really not talking about that many people.

  6. GDub says:

    Just as with the EIT and the arena, I again don’t understand why so much time and political capital is spent on a concept that likely will have little or no impact on s0lving the problem?

    I’m sure there are some high paying managers and execs at Easton firms that may pay a bit more, but I’d prefer to see a press outlet examine the city’s assumptions on revenue versus anticipated pension costs.

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