It’s not an accident that nice places to live have high tax rates

Thursday, May 8th, 2008

Patri Friedman notes that it's not an accident that nice places to live have high tax rates:

I think many people would agree that Manhattan is one of the best places to live in the country, although it’s a bummer that it has such high tax rates. Many people would also agree that California is a lovely state, although it’s too bad that it has such high tax rates.

This correspondence between tax rates and good places to live is no accident. It is exactly what the model of government as a stationary bandit, or my theory of Dynamic Geography, predict. Government works partly by exploiting fixed populations. The more the population likes its fixed location, the higher the rent that government can expropriate from them without driving them away.

For those of us who like culture and “action”, this sort of sucks — it means that part of the value of anyplace cool will be taken away by the government.

I’m not sure that his seasteading notion gets around this problem.

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