As our area again faces the demands of public leadership to raise taxes, as this Bee story notes (good to see some resistance), here is one about Baltimore, one of the once-great cities in our country which raised taxes regularly and now provides an object lesson, in this story from the Wall Street Journal.
An excerpt:
“If you've seen HBO's "The Wire," you know why those of us who live in Baltimore are often asked whether our city really is the hellhole it is portrayed to be on TV.
“Our answer is, well, yes. Baltimore deserves the Third-World profile it has developed because it has expanses of crumbling, crime-riddled neighborhoods populated by low-income renters, an absent middle class, and just a few enclaves of high-income gentry near the Inner Harbor or in suburbs.
“This wasn't what Baltimore looked like in the 1950s. Then it was a prosperous, blue-collar city of about 950,000 with a median family income 6.6% above the national average. Back in the good old days, Baltimore had a smaller percentage of residents living in poverty (22.7%) than the nation as a whole (27.8%), and a greater percentage of families (23.1%) earning a middle-class income of at least $44,600 in today's dollars than the rest of the country (19.1%).
“Today, the city has a population that is almost 50% smaller, and about 40% of families with children live at or near the federal poverty line. Among the country's 100 most populous cities, Baltimore ranks a shameful 87th on median household income.
“How did this happen?
“Most people think of cities as dense concentrations of people. They are that, of course. But they are also dense concentrations of capital – homes, offices, factories, theaters and roads. All of these assets are attractive to people because, when they are in close proximity to each other, they offer the chance of a more prosperous life.
“The problem is that once capital is built, it can become a target for tax-and-spend politicians who bank on the fact that physical capital will continue to draw people, even as it is taxed more heavily. This is what has happened in Baltimore. The city has waged a war on capital for more than 50 years, raising property taxes an astonishing 21 times from 1950 to 1985.”
