Why High Taxes Suck

by Dual Income No Kids on February 7, 2008 · 0 comments

Hi All,

I’m running around like crazy getting ready to head off the land of nestle and watches (e.g. Switzerland). But before dashing off to the airport, I wanted to take minute to complain a bit about DC’s tax situation.

For those of you outside the beltway – thats most of the real world – DC experienced a real estate boom in 04, 05 and 06. Because of this, property taxes skyrocketed. In some neighborhood’s the rate doubled. Well, now in 08′ real estate prices have leveled off in DC, but we’ve still got the high levels of real estate tax. People don’t always understand what this means, but from everything I’ve read and understand its clear that high taxes impact economic prosperity.

Just to reference this point: We live in a transitional neighborhood in DC. There are several businesses in the area that cater to a working class clientèle. One of them I love – its a discount clothing store. Their business model is terrific, they buy slightly imperfect name brand stuff and sell it at a steep discount. In other words, its great source of cheap good quality clothing. Now, due to higher property taxes, it looks like their landlord is trying to raise the rent. Probably the place is going to close up shop. If that happens people in our neighborhood will have to go elsewhere for low cost jeans.

While economic dynamics of the District are obviously complex – I’m seeing a relationship between high taxation and pressure on local retail. And its not a good thing.

Best,

James

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