Metropolitan Taxation in the 21st Century

As we enter the 21st Century, local governments will face challenges to how they raise revenue. Existing local tax systems are ill equipped to meet future basic revenue needs. Moreover, economic and technological changes will inevitably and profoundly alter tax systems of all governments. The problems with existing tax systems and future economic challenges will likely lead to an environment in which local taxation will be limited to an extent unseen in American history. The limitations will challenge the ability of local governments to fund basic services-a function that must be performed. The limitations will also alter the relationship between local governments within a metropolitan area. The ability of local governments to use tax policy as a means of furthering economic development, i.e., competing with neighboring jurisdictions, will be greatly reduced. Finally, local tax limitations will lead local governments to seriously consider an alternative system for collecting revenue-land value taxation.