Agenda - 01-23-2018 7-a - Report on the Orange County Tax Equity Study

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76 Table 8. Public Usage Survey Results By Municipality— Maximum Possible Usage V. Conclusions The problem of equity vis -a -vis government provided goods, services, and tax burdens is an issue of growing interest to taxpayers, government leaders and administrators, and other stakeholders. All sides want to ensure that taxation, and the government provided benefits that taxation brings about, are distributed as equitably as possible. Unfortunately, there is not an objective definition of what `equity' actually is and therefore the topic of equity is normative in nature. Nevertheless, this report has suggested two possible definitions— equity on the basis of ability to pay and equity on the basis of usage. The first definition means that those households that have higher levels of income /wealth should generally pay a larger share of taxes and receive smaller shares of benefits than less affluent households. Of course, the exact ratio of these taxation and benefits shares is once again a normative issue. The second definition means that, generally speaking, households should pay taxes to fund the government provided goods and services that are available to them and that they not pay taxes to fund government provided services that are not provided to them. This second definition of equity can be tricky to accurately calculate though as the example of public education shows. Even though a household might never have any children in the public school system that does not mean that they don't receive any benefits from the provision of public education. The doctor that operates on them, the engineer who builds the roads that they drive on, and the park ranger CCM Economics, LLC Orange County Tax Equity Page 39 Orange County Carrboro Chapel Hill Hillsborough Mebane Unincorp Parks 100 100 100 100 100 100 Library 100 100 100 100 100 100 Transportation 11.95 23.8 8.69 17.7 16.6 6.3 Recycling 87 85.4 85.9 85.4 91.7 94.2 Senior Center 34.87 33 38 40 0 34.14 Health 16.7 4.76 9.7 19.35 50 16.58 W i Fi 63.6 69 51.1 60.5 49.9 68.4 V. Conclusions The problem of equity vis -a -vis government provided goods, services, and tax burdens is an issue of growing interest to taxpayers, government leaders and administrators, and other stakeholders. All sides want to ensure that taxation, and the government provided benefits that taxation brings about, are distributed as equitably as possible. Unfortunately, there is not an objective definition of what `equity' actually is and therefore the topic of equity is normative in nature. Nevertheless, this report has suggested two possible definitions— equity on the basis of ability to pay and equity on the basis of usage. The first definition means that those households that have higher levels of income /wealth should generally pay a larger share of taxes and receive smaller shares of benefits than less affluent households. Of course, the exact ratio of these taxation and benefits shares is once again a normative issue. The second definition means that, generally speaking, households should pay taxes to fund the government provided goods and services that are available to them and that they not pay taxes to fund government provided services that are not provided to them. This second definition of equity can be tricky to accurately calculate though as the example of public education shows. Even though a household might never have any children in the public school system that does not mean that they don't receive any benefits from the provision of public education. The doctor that operates on them, the engineer who builds the roads that they drive on, and the park ranger CCM Economics, LLC Orange County Tax Equity Page 39