The latest Republican fairy tale about tax redistribution is badly miscast. Our state’s municipalities are portrayed as villains enticing rural yokels to spend their money in town.
As punishment for this shocking abuse, legislators propose to take sales taxes collected in the cities and give it to mostly rural counties. I’m sure those counties can use it, but that’s not the point.
Municipalities provide services to the merchants within their bounds: water, sewer, fire and police protection, transportation, solid waste management and more. These services cost money, and people who live outside the cities contribute only sales taxes to pay for them.
A country dweller who goes to The Streets of Southpoint mall is allowed to drink the water, use the restrooms and call the city police if she is robbed. She doesn’t have to take home her trash generated at the food court. So who is subsidizing whom?
People choose to live in rural areas in part because taxes are lower than in cities. Merchants locate in cities because that’s where the customers are, but also because that’s where the costly infrastructure is that fuels commerce.
And rural residents aren’t hapless rubes. They make economic choices in their own interest. It’s called a market.