Sunday, July 19, 2009

Development Desperados

Just a few thoughts on Mike Johnson's article, in the Milwaukee Journal-Sentinel, Democrats zoom in on property tax loophole.

Johnson opens with the crux of the issue, "Senate Democrats are moving to close a loophole that has given developers huge property tax breaks by planting crops on land that is zoned for residential and business purposes."

Developers whine that not allowing them this ability to cheat on their taxes, and essentially be subsidized by the rest of us, will impede their development plans. In reality, closing such a loophole will encourage more efficient development - promoting higher density and agglomeration economies. Which would lead to more optimal outcomes, rather than allowing developers to sit on land, pay artificially low property taxes, and lobby local and state government to subsidize development on and around their land.

This sentence from the article sums up the inequity of the situation, "...the loophole shifts property taxes that should be paid by developers to other taxpayers, mostly homeowners."

No comments: