Virginia Postrel writes:
PUBLIC policy experiments rarely produce complete successes or total failures. They usually leave room for people with different goals or values to keep arguing.Occasionally, however, there's a policy disaster so catastrophic that everyone agrees that something has to change. California's convoluted attempt to deregulate electricity was one example. Texas's decade-long experiment in school finance equalization - universally referred to as Robin Hood - is another.
1) It's Virginia Postrel! She rocks!
2) It's intelligent and well written (see #1)
3) I think we may all agree on the amazing stupidity of this.
The good people in the Lone Star State have decided that "the rich" should pay additional property taxes to fund "the poor." Well, that sounds fair, doesn't it? Johngalt? Dagny? You guys in?
MIRABILEFREAKINDICTU! It doesn't work. For some untold reason, it seems to depress the value of houses scheduled to pay the tax, none of whom get the benefit of improved education in their district.
I seen some bad things in my day, kids, but this really is one of the stupidest gub'mint programs ever. I think the name "Robin Hood" gives the first clue.
"Our estimates suggest that Robin Hood caused Texas to lose a net of $27,000 per pupil in property wealth," write Professor Hoxby and Ms. Kuziemko, a doctoral student. That's real money.To understand why Robin Hood is so destructive, consider the market price of a given house. The home's value depends not just on how big the house is or whether it has walk-in closets and granite countertops. "It also depends on how many property taxes the homeowner is going to pay and what he or she is going to get in return for those property taxes," Professor Hoxby explains.
Property taxes depress the value of a house. The amenities those taxes buy, including good schools, increase the value. The final price reflects the net value of the taxes the homeowner pays.
Robin Hood essentially raises taxes while reducing benefits, creating a downward spiral in home values and property tax receipts. For each district, the state divides the total assessed value of property in the district by the number of pupils. (Districts get higher per-pupil weightings for such factors as students with learning disabilities or limited English proficiency.)
Since you said comments would be "superfluous" I guess I'll have to add one or two.
Property tax financing of public schools is obviously not a "complete success." Why is the first instinct of government to enforce redistribution as a solution to imbalances caused by a progressive tax? It would be simpler, fairer and more effective to flatten the tax. The property tax for schools should not be a flat percentage (and therefore, progressive) but should be capped or, better yet, a fixed fee per household.
And this change would not even require proponents to disavow altruism, since everyone has to pay for the education of his neighbor's kids even if he hates children or is ideologically opposed to the PC, save the whales, man is killing earth, your feelings matter most claptrap that our public schools routinely peddle. (At least a flat school fee can be justified on the grounds of keeping the little hoodlums off the streets for five hours a day. That doubtless increases property values.)
Posted by: johngalt at October 8, 2004 10:09 AMOne of those ideas that makes so much sense, you know it could never happen. People paying a fair share? Shouldn't a guy in a big house pay more, like he does at the grocery store and the dentist and at McDonalds?
Posted by: jk at October 8, 2004 03:33 PMThe McDonald's reference piqued my interest. About 8-9 years ago right here in Colorado the Republicans were pushing a bill to use state funds to subsidize public transit for lower income workers who were willing to travel to the suburbs for jobs. I was living down in Littleton at the time and it seems that the local fast food establishments could not pay enough to entice local upper middle class high school kids to work. I thought it interesting that rather than charge $.89 for that taco they were determined to keep the corporate price of $.59 and have subsidies to help import workers for lower hourly wages. Why shouldn't burgers and tacos in high rent districts cost more? By the same token, setting aside or buying up land for a school in an area of higher land values costs more. Who should bear those costs?
Posted by: Silence Dogood at October 8, 2004 03:58 PMChains think their pricing part of the brand and enforce certain aspects very strictly.
A school district could certainly charge a higher tax rate, I don't think anybody objects to that. I like the idea of everyone in that district paying the same rate.
I oppose progressive tax rates on economic grounds, Johngalt (I believe) opposes them on moral grounds. My point is that I pay the same $1 for a double cheeseburger as other people, they don't ask for an income statement and charge me a "fair" rate. Why did the idea of paying more for government become universally accepted?