Comment 30333

By A Smith (anonymous) | Posted April 21, 2009 at 21:06:59

Jason >> Hamilton may need a higher tax rate in order to get the transit system up and running

After reading about the history of transit in Boston, it appears as though light rail has been a part of their city for many decades (tinyurl.com/dlvzqm). However, even though this was the case, tax rates in 1985 were still at 2.12%. How could tax rates be so high if light rail is so effective at promoting investment? The reason is that government doesn't like limiting spending if it isn't forced into it.

In the 27 years since a cap on spending has been in effect, Boston's tax rates have fallen from over 2% to just around 1%. Therefore, while LRT may be great at promoting investment and increasing the quality of the city, it doesn't stop government from wasting money additional money and creating high tax rates as a result. The only sure way to promote more private investment is to limit overall government spending across the board.

Therefore, while you may be 100% on the mark as far as LRT goes, this alone will not spur private investment if government simply spends the increased tax revenues that it creates.

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