The following appeared in the editorial section of a local newspaper:
“This city should be able to improve existing services and provide new ones without periodically raising the taxes of the residents. Instead, the city should require that the costs of services be paid for by developers who seek approval for their large new building projects. After all, these projects can be highly profitable to the developers, but they can also raise a city’s expenses and increase the demand for its services.”
Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
This city’s citizens are growing tired of paying higher and higher taxes to support government services. Officials are suggesting that the city’s solution may be to tax developers
The speaker makes a bold statement, one that appears to support his point by appealing to common sense. However, there are flaws in the reasoning and evidence used to support this claim. First, and as alluded to above, the idea that the ‘costs’ of services are burdens is questionable. Developers can afford to pay for the services they use without increasing taxes. By law, all businesses must pay property taxes. Any developer planning a large building project must pay those taxes as well. So, although the taxes will be higher, the developer will be paying the same
However, the taxes raised from these projects will go to offset the costs of public services that the city must provide to keep the project from being an economic disaster. The taxes will fund services such as police, fire, and sanitation. If there are cost overruns, then the city will make up the shortfall. For example, one of the city’s major projects was a new convention center. The project had so many cost overruns that the city began charging the developers rent instead of taxes. Although the building was profitable to the developers, they still managed to make a profit on the deal, and the city also recouped the money it had spent on the project
The speaker’s argument fails to take other factors into account. Developers often build projects to make profits. Their profits can be increased by building projects large enough to attract tenants from other cities. As the new buildings bring in income, the developer can lower the rent that he charges the tenants, making his project even more profitable. Thus, the developer’s profits will increase. The developer will choose to build projects as large as possible because doing so will increase his profits
The speaker also fails to consider how large a building project must be before the profit doesn’t offset the increased taxes. If the city were to require all developers to pay higher taxes, then the developers would have to build smaller projects. That would be good for the city, but the city cannot afford to subsidize the smaller projects
The speaker’s argument also assumes that the cost of public services will increase. However, this is not necessarily true. The current state of development in the city means that there are more people, more businesses, and more public services needed. However, the city’s existing infrastructure has not expanded to accommodate the influx of people, businesses, and services. A developer’s project may help to bring public services up to date. If the developer builds a new road, the city may no longer need the roads and bridges that it has built in the past. Further, the new roads may draw more people into the city, creating more demand for public services. Therefore, the city may actually see a decrease in the amount of public services it needs to provide
The speaker’s argument assumes that a new building project will bring more expenses to the city. This is not necessarily true. If the developer builds the buildings in a location that already has adequate public services, then the new residents will not need as much city services as the current residents. For example, a new building project in downtown area is likely to bring in new businesses and residents. However, downtown area already has many public services, including police and fire protection. The new businesses and residents will take advantage of these existing services. Thus, the number of public services needed in downtown area will not increase
The speaker argues that the city should tax the developers rather than raising their costs in other ways. Regardless of how profitable a project is, it is still a business. Businesses, not individuals, are responsible for paying taxes. So, if the city government requires developers to pay higher taxes, then the city government will have to increase its taxes as well. Perhaps the developer will renegotiate the deal so that he pays less in rent for use of the public land and city services. If the developers have to pay higher taxes, then they will build smaller projects. This will be good for the city, but the city will have less money to spend on other projects
The speaker’s argument lacks supporting evidence. He relies on assumptions that are based in logic, but lack any evidence to support his claims
To strengthen the speaker’s argument, he would need to consider other factors that will affect the size of the building project and its potential profitability. For example, state law may require that the developer pay for a percentage of the cost of public services. If the city wants to attract large development projects, then it will need to offer the developers incentives that will provide them a high return on their investment. Therefore, the city will need to build more public services. If, however, the city requires the developers to pay for the public services, then the city will forgo these incentives, and the city will not attract as many large development projects. The speaker’s argument also needs to consider the possibility that some developers may not be able to afford the higher taxes. Therefore, the city cannot simply demand that all developers pay for the increased costs.