Apr 30

I wrestled with sharing The New Shame of the Cities as it is written from a political, anti-Democratic perspective, but found it so valuable that I decided to post it anyways.  Neither party is exempt from bad actors.  Read this from an apolitical view and you will find an equal value.

Milwaukee is prominently portrayed in the article, but the in-depth analysis of what happened to Detroit bears a fitting resemblance to our city. Replace Detroit and with Milwaukee in the passages below.  I think you will find it matches our reality too much.The 352 footnotes are as insightful as the story. Some links in the footnotes are stale, but the articles are available by searching the target site.

Maybe it is time to invite the Institute For Justice to Milwaukee.  The Institue For Justice fought a major rental housing inspection case in Red Wing MN

Hat tip to Richard for sharing it with me.

From The New Shame of the Cities

(1) Taxes:

Because of the middle-class population exodus caused by policies that inflamed race relations, Detroit’s tax base has been in free fall, leading city leaders from the 1960s onward to try repeatedly to regain lost revenue through tax increases.[55] Today, Detroit’s property-tax rates are the highest in America and generally twice as high as the overall average nationwide,[56] establishing a vicious cycle that continues to drive businesses away and cause taxpayers to relocate to the suburbs in still-larger numbers. By 2012, Detroit’s tax revenues—notwithstanding the high rates—were 40% lower, in constant 2012 dollars, than they had been in 1962.[57]

Another reason why Detroit’s stratospheric tax rates have resulted in meager government revenues is because of the city’s rapidly declining property values. Over the past half-century, the total assessed value of property in Detroit has fallen (in inflation-adjusted dollars) by 77%.[58] The median home price in Motown is now just $40,000, and many dwellings in the city’s most blighted areas sell for less than $1,000.[59]

The non-payment of property taxes has also become a widespread phenomenon in Detroit. In 2012, for example, some 47% of all homeowners in the city elected not to pay their taxes — mainly because the city’s cash-strapped government had failed to provide most of the basic services normally funded by such revenues.[60]

(2) Harassing Businesses:

In recent decades, the [people] in control of Detroit have cultivated an oppressive climate for small businesses by instituting a complex constellation of protectionist regulations.[61] In 2013, economist Dean Stansel conducted an “economic freedom” study that ranked the regulatory and tax climates of 384 U.S. metro areas, and found that Detroit placed 345th.[62] The Institute For Justice (IFJ) observes that the massive amounts of “time and money” that business owners must expend in order to comply with “all the regulatory requirements” of Detroit’s “stupefying bureaucracy” cause many aspiring entrepreneurs to “simply give up their business dreams.”[63]

Adds IFJ:
“Multiple inspections and inspection fees, incomprehensible building requirements, expensive, mandatory public hearings, arbitrary discretion by officials, and lengthy processing delays combine to discourage entrepreneurs from undertaking business ventures or improving existing ones. From sign taxes to restrictions on planting trees, the bureaucratic shuffle has gotten so out of hand that one business owner explained, ‘We operate on the basis that we just do what we want to do and the permits will catch up with us sometime.’”[64]

According to one survey, 56% of small-business owners in Detroit are unsure whether they are operating in full compliance with the law.[65]

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