ABSTRACT
In this excerpt from Jane Jacobs’ dialectic The Nature of Economies, Hiram, Murray, and Hortense discuss the impact of taxes – and, specifically, tax subsidies – on development, with Hiram suggesting that subsidies distort values. A cynical person, someone with extensive experience in structuring real estate transactions over the past thirty years, might interject into Hiram, Murray, and Hortense’s fictitious conversation that such distortions in the value of subsidized transactions distort the behaviors of actors interested or involved in such transactions, and that such distorted values are, indeed, an intentional consequence sought by those who promote and advocate for the enactment of such tax subsidies. Anyone who worked their way through the detritus of the S&L Crisis in the United States in the late 1980s will find this discussion about “bubble prices” resonates with the vibration of personal experience.
