Comment by robswc
6 hours ago
What I don't understand is (because I honestly haven't been afforded the time to sit down and think about it, also it's frustrating), why do taxes generally trend upwards for the average person? Doing napkin math it seems to have gone from ~10% to ~28% for average family. These are %-based, why does it need to change? Why can't cities/towns/counties work with the money their citizens can give?
Happening in Austin, Texas recently. City cites:
- Rising cost of core services
- Weak sales tax revenue. This is the city’s second-largest revenue source, and it has slowed or dipped.
- A shrinking property tax base. Officials point to falling property values, appraisal protests, more business tax exemptions, and little new construction adding value to the tax rolls.
- Disappearing one-time money. Pandemic relief funds have run out, and federal funding cuts were anticipated.
- Rising service costs. The new budget’s highlights include $6 million more for permanent supportive housing services, $6 million more for fire overtime to keep four-person staffing, and extra EMS overtime. Employee raises and social services were also major line items.
It is frustrating... if core services are costing more, cut extracurricular services? Why would you lean so much on sales tax, seems obvious this would revert to a mean? If your budget is reliant on infinite new construction it seems a bad budget? Why is pandemic relief cuts a shock to anyone? More housing services? I'm empathetic but there's more homeless than ever before. I know it's simplifying the problem but it just feels like people are punished with permanent tax increases for governments spending more than they should... we start with a new "floor" tax rate and repeat forever? Is it going to get to the point where we work 50% of our time just to pay taxes?
People, as a rule, do not want less service. Services generally function like a ratchet, where once one has been added it is incredibly difficult to get rid of.
So not only is the cost of service to be thought of, but the quantity of services.
The same happens within services too. The police got a helicopter 5 years ago, are they going to turn down another one, or are they going to explain why the new one needs to be more expensive with more capability? Multiply that across every agency.
> People, as a rule, do not want less service. Services generally function like a ratchet, where once one has been added it is incredibly difficult to get rid of.
Makes sense, totally agree... however I don't think generally citizens want to pay _more_ taxes... or at least eventually there's a point where they say enough is enough.
https://www.kut.org/politics/2025-11-05/austin-tx-prop-q-fai...
> The same happens within services too. The police got a helicopter 5 years ago, are they going to turn down another one, or are they going to explain why the new one needs to be more expensive with more capability? Multiply that across every agency.
This should be stopped. Creates exactly the sort of ratcheting effect you described. Mind boggling to me. I've been in-charge of small budgets and buying more stuff after making more money is a big decision, not taken lightly because we can't assume present returns will match future returns.
> we can't assume present returns will match future returns.
Funnily enough, after spending some time in public service albeit in another country, genereally budgeting for public agencies works almost inverse to this.
If you get allocated X budget but only spend 0.8 * X, then next time you will almost always get <X. This is in itself reasonable, you don't get more allocation than you need. In practice though this means you are incentivised to not save money from your allocation iff you expect to need more in the next period or do not want to lose your allocation (maybe a renovation or smth similiar has been pushed back due to external factors).
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I think this misses the important point of how governments tend to get less efficient at scale, and over time.
You could pay more and still get worse services.
Oh for sure, just ask the residents of Austin if they feel services have improved over the last 10, 20 years! I imagine there will be quite a bit of bias and "rose-tinted glasses" but generally speaking I don't think they feel the price tag is reflective of the services they're getting. On that note, not sure why people seem to think of governments as some sort of subscription they pay for and get services in return... but perhaps that is a discussion for another day :)
I don't know about Austin, but where I am the single biggest source of rising costs for the city seems to be its pension fund. Which seems to have severely underperformed the market thanks to the efforts of hedge fund managers who were all hype about dotcoms in 1999, mortgage-backed securities in 2006, cryptocurrencies in 2018, and are probably pretty excited about AI right now.
Very frustrating. ATP the people in charge of that mismanagement are surely out of office...
Percentage increases are the result of your money being worth less. That’s why every good government fights inflation. Stable values of money make it easier to plan budgets, estimate costs, lure investors, and collect taxes.
It’s when the value of money decreases that government has to choose among reducing spending (often by reducing services), increasing tax rates, and electoral losses. Most choose incremental tax rate increases because it’s easiest and the people likely to complain are unwilling to run for office to replace the people who raised the taxes.
Not arguing that sequence of thought doesn't occur, but it bothers me because the reasoning is faulty. If money's worth less, then the appraised value of my home measured in dollars should correspondingly increase. If the biggest taxes are assessed as rates on things that tend to scale with inflation, then it ought to be relatively indifferent to inflation. The only changes you should have to make to your tax system in response to inflation should be raising flat rate taxes.
> why do taxes generally trend upwards for the average person?
One-time money from development runs out, but services like sewers, roads, power, emergency services, snow removal, and so on, need to be paid or saved for every year. Most US cities are sprawling, low-density affairs, meaning they're developed (and paid for) once, but all those roads still need money to maintain. Quoting from [0] to draw attention to what I'm talking about:
> What the tax productivity data shows is that "rich-people housing" with big lots and plenty of room for cars, which were subsidized when the neighbourhood was developed, continue to be subsidized throughout their long existence. Suburban single-family houses on big lots simply do not cover the municipal expense of things like repairing all that asphalt and clearing all that snow
People have asked previously how, if this were true, we would see more cities declaring bankruptcy - and some do [1], while others do what you've noticed, and raised taxes. The car-centric, driving-as-the-only-transportation-method way of life is financially unsustainable.
I'm not going to yell death to the automobile, but to make it the default, and in many cases only way to get around, is not a good long-term plan for cities beyond a certain size.
[0] https://www.cbc.ca/news/business/evs-cities-climate-column-d...
[1] https://wmtxlaw.com/cities-declared-bankruptcy/
In New York state half of property taxes is for county contributions to the state medicaid fund. This excludes the seperate schools tax which is property based. Health care costs drive up many costs in the US including all libality insurances. The second part of this tax mess comes from the excessive military budgets since the late 1970s most of our national debt as of the mid 1990s was from that waste of resources. I understand we shouldn't just cut abruptly but our spend on weapons needs to slowly decline while we fund the transfer of workers out of the military industrial complex. And there are a lot of structural accounting problems like how personal credit card and automobile financing isn't tax deductbable but leveraged buyout interest is. The tax exemption for share buybacks is another budget drain. My instinct is we need a universal national income tax along with a land tax that in some ways exempts housing up to some middle or upper middleclass level.
> In New York state half of property taxes is for county contributions to the state medicaid fund.
That is an insane statistic. Surely the state can throw some weight around to say enough is enough?
I just had my own insane encounter with healthcare. They "accidentally" billed us insurance rate which was about 4-5x more than self-pay. Why is there 4-5x overhead when dealing with insurance? (I know there's the negotiation stuff) but also seems to be quite a mess. I'm actually more mad at hospitals and clinics lately than insurance. Seems they have agreements with companies to "dispense" things at 4-5x the actual price, expecting insurance or taxpayers to pick up the tab. Seems like blatant fraud.
Sorry for the rant, I agree with everything else you mention :)
I seem to recall that NY state medicaid expenditures are completely out of line even when comparing other liberal states with Medicaid expansion, when you compare how much every resident pays.
The answer is almost certainly large scale fraud by organized criminal groups, but investigating and publicizing this is, currently, extremely politically inconvenient.
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>Surely the state can throw some weight around to say enough is enough?
How do you know that it's enough? Baby boomers are old now, which means demand for healthcare has skyrocketed. There's an odd thing I've noticed in political commentary where nobody really thinks that healthcare is expensive, but it absolutely costs a ton to keep people alive. America might have problems with too much overhead, but even here in Ontario, healthcare is by far the province's biggest expense.
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> In New York state half of property taxes is for county contributions to the state medicaid fund.
Chicago..hold my beer. 80% of taxes here go to funding pensions for 2% of city population. Our parking meter money goes to gulf countries because we sold them to pay for city services back in 08.
This doesn't explain it all, but worth considering.
As the cost of living increases, so does the cost of providing public safety workers and their union-guaranteed pensions and benefits. In most cities, public safety eats up a large chunk of the operating/general fund budget (in Austin it's 71.2%)[1, pg. 30], and reducing public safety budgets kills your representative's clout. You yourself can advocate for lower hiring rates or pay and pensions if that's a concern. Any new hire comes with long-term costs for your local government, even after they've left service.
Extracurricular services are highly visible and therefore highly defended by the advocates that claim they reduce crime (by providing structure to youth with nothing else to do, for example). Representatives are typically replaced with those that defend those highly-visible services. They will instead reduce less-visible support services (like IT) that make public safety more efficient/effective.
Since you can't outlaw homelessness, citizens that complain about homeless activity motivate local governments to provide more services that make homelessness less visible/likely. Without those services, public safety budgets need to increase to address more desperation on the streets.
As the population ages and needs more medical care they can't afford, demand for EMS and senior services increases. I've seen arguments to freeze or eliminate property taxes for seniors, but balanced budgets mean non-seniors have to pay more to cover their service costs unless the local government finds additional revenue (fees, fines, more local sales tax that increases living costs, etc.)
You can outlaw abortion for unfit parents, but that also likely creates more welfare service demand over time.
To me, private businesses not increasing wages to meet a standard cost of living means an increase for demand of welfare and public safety services. Local governments can attempt to hold private businesses to a higher tax burden, but are usually preempted by state law in Republican-led states. Your local government has no control over that and has to respond somehow.
To me, the frustration is best placed with private businesses that can afford to provide for their workforce, but instead rely on welfare services to give their workers what they need to survive, so that executive officers can earn more and deliver more to their investors. ~55% of households in the U.S. earn less than $100,000 per year (before taxes). [2]
[1] https://austin.widen.net/s/x8q5hmnwtw/fy-2026-27-city-of-aus...
[2] https://data.census.gov/table/ACSST1Y2024.S1901
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