There are laws about such things. The authority to take a cut off a sale or charge or demand an annual fee for property, whether homes or cars, needs to be officially granted. The funds travel from individuals to a fund for government officials to distribute out for public commitments.
But there are other things local governments do that act as a tax. There are all sorts of city permits required to replace a hot water heater or install a deck. When a builder applies for approval of a subdivision, the city council may say that is all fine and good as long as a sliver of the land is threaded through as a trail and a chunk of green space in the middle is spun up into a playground. The release of land is a tax on the developer. A good one mind you but still a relinquishing of an asset.
What would be the difference between a favorable tax and a verging-on-illegal tax?
Having a developer build in parks and trails at the time of development leaves an asset for the new owners directly, and for the city at large for those who travel further for recreation. This flow of money from a private company back to the community, for the use of all residents, seems to fall in the spirit of the arrangement. It is a particularly timely ask since retrofitting older neighborhoods with parks and trails is difficult and impractical.
Consider another example. A builder wants to convert a five-story building in a historic district in a significant US city. There are extensive regulations associated with the age and history of the area. There are also regulations in place to meet current environmental concerns. Without spending the time to delve into every detail, the end result is that the builder must install solar panels on the roof of the building, which cannot be serviced by the building due to its age and preservation requirements. The building’s infrastructure cannot effectively utilize the energy output from the solar panels.
The final agreement is to hand over ownership of the panels to the utility company. Their maintenance and output will now be maintained by a completely separate entity, even though they sit atop the developer’s project and the developer’s bottom line had to muscle in their expense.
Doesn’t this seem like a direct transfer of funds from the builder to another semi-private company? Doesn’t it seem like a redistributive tax or at least a subsidy? Does the municipality this type of taxing authority?
Home Economics 