Saturday, August 17, 2013

Henry George lives in Altoona

So Pittsburgh ran away from the Land Value tax following Allegheny County's 2001 mass assessment. Long story there which we'll skip. But Altoona to our east has been working to put in a similar, if more extensive, land value tax. Not always easy to understand.  In the Altoona Mirror: Altoona property tax bills confuse property owners. h/t to David Levinson and Matt Yglesias and others for catching the news item.

To skip the lesson, but for more on the land value tax in the news there, see the relevant Wikipedia entry.

Henry George is much forgotten in Pittsburgh, which was the largest municipality to use a George-inspired 'tiered' tax from 1916 until the system was abolished in 2001.  No notice was there even of a major Henry George conference here just a couple weeks ago.

But now that the election is past, it is safe enough to throw this up here.Not only did Pittsburgh have a two tiered tax for 85 years, but in modern times it strengthened the system.  In 1979, former city councilman, and later US representative, Bill Coyne pushed the move from a 2-1 tax ratio for land vs. structures, to a roughly 5-1 ratio in the late 1970s.

Then a decade later it was former Mayor Sophie Masloff who fought to try and make the city more amenable to younger households by shifting the city's tax base from what was a higher income tax on residents to more revenue from the heavily weighted tiered real estate tax. Yes, it was all about trying to keep young people in the city... sound familiar? Whether you like the tax shift or not, everyone liked the lower income tax idea and it was supported broadly... if not by everyone.  As mayor Masloff was not trying to gut the city's revenue and the idea was a tax neutral shift.  No free lunch and a lower income tax meant a higher real estate tax.

In what has to constitute one of the greater acts of political courage in Pittsburgh history, Mayor Masloff went to bat fighting for the higher real estate tax part of the package deal.  In the end she partially won. The real estate tax was raised, but not by enough to really make the deal revenue neutral.  I personally think the resulting gap that was created lead to the structural deficit that lasted through the 1990s with an immense number of repercussions we live with today.  But the crescendo of the political fight came when it was time to raise the property tax. A remarkable piece of city of Pittsburgh political and economic history is embedded in a video captured and retained by Pittsburgh's Georgist in chief Dan Sullivan. (h/t to Jon Geeting for bringing this to our attention a few months ago)

I am not exaggerating. This really is the Rosetta Stone of the City of Pittsburgh's recent  history. It is the key to a lot of political history... to a lot of the city's economic history and for sure the city's recent financial history.  Worth watching the whole thing and you may recognize more than a few faces still around two decades later.

Again, watch a mayor argue against her core constituents for a tax hike that will hit them more than others.

pghtaxswap1990vimeo from Dan Sullivan on Vimeo.


Blogger Unknown said...

This comment has been removed by the author.

Wednesday, August 21, 2013 1:02:00 PM  
Blogger Unknown said...

Actually, Altoona did this in January 2012, after a ten-year shift. We prepared the pre-adoption study and some post-adoption reporting.

CSE/Urbantools first researched and assisted Altoona, PA in its transition to land value tax in 2001. This year, in 2011, Altoona became the first city in the USA to impose no property tax ion buildings. Currently, school and county taxes are not primarily land-based.

This report looks at some outcomes in the past 10 years, along with the revenue effects of the last year of transition to a land only tax, as well as the impact of reversion to the standard property tax.

Wednesday, August 21, 2013 1:06:00 PM  
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