Letter to the Editor: History Shows Tax Cap Is No Pie-in-the-Sky Plan

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It was amusing to read Frank DeFilippo’s screed concerning our Washington Post article on Prince George’s County’s tax cap and the desirability of a similar cap in Baltimore City. The sheer volume of Trumpesque, ad hominem bile spewed forth by Mr. DeFilippo in his defense of Baltimore’s tragic status quo makes clear that we struck a nerve.

Those like Mr. DeFilippo who insist, against all logic and evidence, that a competitive property tax rate is unnecessary for Baltimore to prosper and generate opportunities for its citizens should ask themselves: How is that working out? The city is now in its seventh consecutive decade of disinvestment and flight, with terrible consequences for its remaining residents: a shrunken job base, lower incomes, rising poverty, and all the fiscal and social problems that accompany these trends.

Close-minded pundits and policy-makers who presume that tax policy is irrelevant to these problems must learn a little history: Not only did a tax cap have a favorable effect on Prince George’s County’s destiny, but it has been crucial to turnarounds in cities like Boston, Portland, and Seattle.  All have benefited enormously from tax caps and are among the nine cities that have caught and passed Baltimore on the population rankings just since the 2010 census (along with business-friendly cities like Nashville, Oklahoma City, Las Vegas and others, as America’s great urban boom bypasses B-More).

Those who truly want to treat the root causes of Baltimore’s problems and enable its most vulnerable residents to flourish are invited to read about our plan for a competitive city tax rate in the Journal of Applied Corporate Finance. Or you can be distracted and discouraged by spokesmen for failure like Mr. DeFilippo, and watch the city continue to wither and its residents suffer.

–STEVE H. HANKE AND STEPHEN J.K. WALTERS

The writers are, respectively, professor of economics at Johns Hopkins University and a member of Gov. Marvin Mandel’s Council of Economic Advisers, 1976-77; and professor of economics at Loyola University Maryland and a member of Gov. William Donald Schaefer’s Advisory Council on Unemployment Compensation, 1990-92.

 

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