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Thread: Commuter tax

  1. #1

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    Commuter tax

    This has probably been discussed ad nauseum on this site, but I have yet to find a thread on the topic. I am curious to find out what people think about the concept of commuter taxes and where I can get more info on the concept.

    As a city dweller, I can't help but wonder how many of my tax dollars are being spent so that people who choose to use all that my community has to offer (jobs, infrastructure, cultural facilities, etc), but live outside of its borders, can clog roadways that they have not paid a dime for. These are usually the same people who rail against any public money being spent for the center city or public transit, but scream bloody murder when they don't get their road widening project.

    Are there any cities in the US who have successfully added a commuter tax, ala London, UK?

  2. #2
    Cyburbian boiker's avatar
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    it's been long discussed in my childhood hometown to charge an "out-of-towners" tax. The small town of 14,000 serves a contiguous population close to 22,000 (all the same zip code). In effect, the 14,000 end up paying (roads, extra police protection, emergency fire calls, recreation facilities) for the effects of the 8,000 that don't.

    The only solution that was passed was a 1/4 cent sales tax increase. The 8,000 contiguous residents do not have sewer (dump into abandon mines or use septic), no curb, no sidewalk, no storm water control, and they are happy with it. Forceable annexation has long been considered, but is a legal cost issue.

    I know where dealing with two different community scales here, but I don't know if there is a fair answer in any situation.
    Dude, I'm cheesing so hard right now.

  3. #3
    Unfrozen Caveman Planner mendelman's avatar
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    I think it would be rather cumbersome to regulate and enforce. Plus, isn't it good that the people who come into the city spend for activities in the city and not in their own locality?

    The closest thing I would think feasible would be a local income tax - weighted more heavily to those that live outside the city than inside.

    But in the end, these type of taxes just help create and/or reinforce an "us v. them" attitude, and in large metro areas (where exchange between munis. is much more fluid and diverse) that kind of hostility can be unproductive when it comes to large metro wide projects/initatives.
    I'm sorry. Is my bias showing?

    The ends can justify the means.

  4. #4
    Cyburbian jordanb's avatar
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    Quote Originally posted by Pride of Place
    Are there any cities in the US who have successfully added a commuter tax, ala London, UK?

    New York City has had a commuter tax for years, managed by NYS I believe.

    But I agree with mendelman. The last thing american central cities need is suburbanites that are even more angry and spiteful. And that's exactly what this would cause. I'd be more for high tolls on the expressway system, as I think it'd function the same way, and would even be able to nab exurban commuters.

  5. #5
    Cyburbian The One's avatar
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    Try

    Quote Originally posted by Pride of Place
    This has probably been discussed ad nauseum on this site, but I have yet to find a thread on the topic. I am curious to find out what people think about the concept of commuter taxes and where I can get more info on the concept.

    As a city dweller, I can't help but wonder how many of my tax dollars are being spent so that people who choose to use all that my community has to offer (jobs, infrastructure, cultural facilities, etc), but live outside of its borders, can clog roadways that they have not paid a dime for. These are usually the same people who rail against any public money being spent for the center city or public transit, but scream bloody murder when they don't get their road widening project.

    Are there any cities in the US who have successfully added a commuter tax, ala London, UK?
    I just got back from Loudoun County Virginia and noticed that the Dulles Toll Road from DC West has a higher peak hour charge of $2.40 (for the segment I was on). What idiot figured out that they needed exactly .40 cents! You should have seen the Que's while the attendant was searching for exact change
    “The way of acquiescence leads to moral and spiritual suicide. The way of violence leads to bitterness in the survivors and brutality in the destroyers. But, the way of non-violence leads to redemption and the creation of the beloved community.”
    Dr. Martin Luther King, Jr.
    - See more at: http://www.thekingcenter.org/king-ph....r7W02j3S.dpuf

  6. #6

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    Quote Originally posted by mendelman
    I think it would be rather cumbersome to regulate and enforce. Plus, isn't it good that the people who come into the city spend for activities in the city and not in their own locality?
    Yes, I think it's great. Come and visit and spend. It's a bit of a paradox. These are the same people (usually) that complain bitterly when an urban neighborhood gets public money for any sort of improvements, yet they pour onto new publicly funded freeways taking them to adjacent counties that boom with cul-de-sacs as far as the eye can see; doing their best to create grid-lock on infrastructure in our city (on their way to jobs here) that city/county taxes pay for.

    Quote Originally posted by mendelman
    But in the end, these type of taxes just help create and/or reinforce an "us v. them" attitude, and in large metro areas (where exchange between munis. is much more fluid and diverse) that kind of hostility can be unproductive when it comes to large metro wide projects/initatives.
    I agree. I am starting to resent my suburban brothers and sisters who want nothing to do with regionalism. Turf wars are going on as we speak. When the Mecklenburg County Planning Commission balked at the idea of a 1.4 million sq ft mall due to transportation issues, the Mills Company simply went across the border (literally...3,000 feet) to Cabarrus County and built with no trouble at all. Now all of the traffic issues that Charlotte raised about the mall have come true. Trouble is, it's not just Cabarrus County that has to deal with them...it's Charlotte as well.

  7. #7
    Cyburbian
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    Commuter tax unconstitutional

    New York City featured a commuter tax - until it was ruled unconsitutional. New York's highest court affirmed the ruling in a unanimous decision.

    Anyhow, motorists entering Manhattan must pay tolls that are akin to a commuter tax. From New Jersey, for instance, the toll is $6.

  8. #8
    Cyburbian
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    Ohio has a "commuter" tax in the form of a local income tax, usually 2%. You have to pay it to the municipality in which you work.

    When coupled with property-tax incentives to new businesses to move their offices into a city, businesses get a tax break while the employees have to pay the income tax. In effect, it's a way to lower your wages without anyone noticing. It does mean cities get money for commuters to plow roads, etc. for them.

  9. #9
    Cyburbian jmello's avatar
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    Philadelphia had a city income tax when I lived there. I am pretty sure it still does. That's to catch all the Jerseyans and Main Liners who work in the city but do not pay city property taxes, or in the case of Jerseyans, PA sales tax.

  10. #10
    Cyburbian DetroitPlanner's avatar
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    Detroit has an income tax that is slowly being reduced (as a result of a deal to get new casinos with the State). The tax is levied on work done within the city (for non-residents). Residents get charged the whole frieght including tax on income from interest and investments. It started out as 3 percent for residents, and 1.5 percent for non-residents. At the end of ten years it will be 2 percent for residents and one percent for non-residents.

    Most cities in Michigan do not have an income tax. This makes Detroit compete even harder to get middle and upper income residents. It also works against the City when companies look to move. Therefore, such a tax is not necessarily a good thing.
    We hope for better things; it will arise from the ashes - Fr Gabriel Richard 1805

  11. #11
    Cyburbian Cardinal's avatar
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    I am opposed to "commuter taxes" or "head taxes" or whatever you want to call them. It is only fair that I state that up front. I believe they are yet another impediment to creating economic success within inner cities, in their downtown cores and neighborhoods and industrial districts. These places are often at a cost disadvantage relative to their competition, and adding additional taxes is not going to help.

    Don't these people contribute to the city's costs? Some of them are city residents themselves. Suburb-dwellers also pay sales taxes, income taxes that are channeled to the inner city, patronize city businesses, donate to support those cultural institutions, and otherwise make positive contributions to the central city. The businesses at which they are employed pay property taxes on their buildings, pay for water and sewer service, and otherwise support the city as well.

    And what of city residents? Don't they use suburban roads and highways? Aren't they as likely to work in the suburbs? Don't they visit suburban amenities?
    Anyone want to adopt a dog?

  12. #12
    Cyburbian jmello's avatar
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    Quote Originally posted by Cardinal
    Suburb-dwellers also pay sales taxes, income taxes that are channeled to the inner city...
    In many states, the municipalities and counties do NOT see any revenue from sales or income taxes, outside of grants and such from the state.

  13. #13
    I have never quite understood the arguments for a commuter tax, though perhaps it depends on circumstances and taxation methods from state to state. It has even been brought up here in Athens, Georgia.

    It seems like many counties in Georgia complain about new residential construction because they don't contribute much to the tax base -- being of residential value, taxed at a lower residential percentage, with a homestead exemption also taken -- and because of their impact on schools and infrastructure.

    Yet leaders in Athens have called for a commuter tax because of the supposed toll on resources. However, every new commuter is a non-resident requiring no subdivision roads or infrastructure to be maintained by scant residential taxes, but the non-residents contribute to employing businesses that pay a high rate of taxes.

    Then wouldn't it be great to have all commuters and no residents? And aren't we always raising our local minimum house sizes in order to protect our tax base, forcing workers to live in outlying counties anyway?

    So we lose money because our houses don't pay enough taxes, and we also lose because commuters use services -- it just doesn't add up. I think the call for a commuter tax is usually more about finding creative ways to raise revenue than it is to recover cost from an actual commuter burden. I don't buy it.

    I understand that supposedly urban areas have an intense usage of services, but I look at rural Madison County here that has no industry, one supermarket, a lot of farmland, and a lot of houses -- and they claim they're having trouble because they don't have a commercial tax base. Besides, the urban strain on services is often because of low-income residents requiring services, not the commuters working at businesses that pay lots of property tax.

    Is there any good argument for a commuter tax? Urban areas have a lot of highways paid for by state and federal funds, so the transportation argument can't carry much weight.

  14. #14
    Cyburbian
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    Some time ago Philadelphia chose to enact fairly high wage taxes in lieu of raising property taxes. The resulting consequence was that most of the high paying jobs simply moved from downtown Philadelphia to the suburbs, mostly to King of Prussia. Even today when a company moves its operations out of the city, it is the equivalent of giving its employees a 10% pay raise.

    As someone else pointed out, plenty of urban residents now commute to the suburbs for work and shopping and recreation. Should the suburban districts charge these people a commuter tax as well?

  15. #15
    Cyburbian Brocktoon's avatar
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    I work in a city with a high property tax. This has forced many of the residence to move to the townships and puts the city at a competitve diadvatage in retaining current employers and attracting new ones.

    The site search consultants I have talked with are more concerned with the property tax than the income tax, in fact I have spoken with a few that do not even inquire about a commuter.
    "You merely adopted the dark. I was born in it,..." -Bane

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