14 Ways High Taxes Are Making Cities Unlivable
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Many people love to think of cities as places filled with opportunity, innovation, and culture. For many, however, the luster of urban life has started to fade quickly, and one of the leading culprits is high taxes. High taxes are squeezing small businesses, pushing middle class families to the brink, and turning cities into playgrounds for the wealthy, and everyone else is out of the game.
It’s not just an issue of dollars coming out of our pockets, it’s what we’re getting—or not getting—in return. Housing costs soar, public services are stretched thin, the streets that many called home become financial traps. Not only are high taxes pinching wallets, they are reshaping the very fabric of urban life so that cities are unlivable for countless Americans.
Living Costs Become Unbearable
The plain and simple fact is that high taxes increase the cost of living in cities. Property taxes are hiking up rent, sales taxes are inflating grocery bills, and residents are left scrambling to make ends meet. According to the U.S. News and World Report, a study found that 40 percent of urban households struggle to make ends meet because of increasing cost of living. When you’re trying to figure out if you’re going to pay for groceries or electricity, city life feels more like a nightmare than a dream.
Businesses Shutting Down
High taxes are taking a serious hit on small businesses—the heart and soul of urban neighborhoods. It’s a fact that higher corporate taxes and fees frequently mean the mom-and-pop shops have to shut their doors for good. If these businesses were to leave cities, they not only lose economic activity, but the charm that makes them unique.
Housing Becomes a Luxury
Property taxes are a huge problem in the housing crisis, where affordable housing options are nearly extinct in many cities. These costs are passed through to tenants causing rents to skyrocket. If you’re one of the lucky ones with your name on the deed, you’re probably drowning in property tax bills. It’s becoming harder to buy a home in a world where so many are renters.
Public Services Fall Short
Just because taxes are high doesn’t mean that public services are better. In many cities people pay more and get less. People are left wondering where their tax dollars are going, because they see crumbling infrastructure, underfunded schools and overwhelmed public transit systems. Nothing is more frustrating than the gap between what’s promised and what’s delivered.
Middle-Class Flight
Once central to cities, the middle class is moving out. Families are moving to suburban or rural areas to avoid high income taxes and soaring costs. It’s this “urban flight” which is weakening communities and eroding that diversity that’s so vibrantly alive in city life.
Burden To Low Income Families
Tax systems are supposed to be progressive but low income families end up paying the highest price. Sales taxes are regressive; they take a bigger chunk out of smaller paychecks. It feels rigged to many, that they’re being punished for just trying to get by.
Stifling Innovation
Innovation has always been based in cities, but high taxes are killing creative ideas. Heavily taxed startups and entrepreneurs struggle to survive. Talent and ideas flow to wherever doing business will yield the most returns, and when the cost of doing business outweighs the benefits, cities are less dynamic and less competitive.
High Gentrification
Often, high taxes also speed up gentrification, forcing out long term residents and replacing them with wealthier newcomers. Taxes climb high and longtime residents can no longer afford to stay, and neighborhoods lose their history, culture and soul.
Criminalizing the Poor
If cities raise fines and fees to make more money, the poor bear the brunt of it. Parking tickets, court fees, and all those hidden ‘taxes’ are a financial disaster waiting to happen for those living paycheck to paycheck.
Stagnant Wages and Rising Costs
Taxes go up, wages don’t. The result? The gap between the earnings and the necessary living of people is widening. Median wages in the U.S. have barely moved in decades, and high taxes are harder to swallow, according to Pew Research.
Draining Retirement Funds
High taxes can drain retirees’ savings for them to just stay afloat. In reality, many seniors are being forced to leave cities where they’ve lived for decades because their fixed incomes can’t keep up.
Less Money for Essentials
Families often have less disposable income with which to pay for essentials such as healthcare, childcare and education, when taxes are high. If you’re always pinching pennies, investing in a better future seems impossible.
Mental Health Strain
High taxes cause financial stress beyond just wallets — they affect mental health too. Paying bills can be an anxiety provoking experience, and can cause depression and strained relationships. Cities don’t really talk about it, it’s a silent epidemic.
Eroding Civic Trust
High taxes may be one of the most insidious, because they erode the trust that there is in local government. Cynicism flourishes when people are feeling overtaxed and under served. High taxes don’t build community, they often breed resentment and division.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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