Tax Foundation Forum: Making Sense of Profit Shifting has reached its midpoint. In this halftime report, we provide a synopsis of the first nine of the 18 interviews in the series. This two-part review summarizes the key...
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Chicago Voters Oppose Tax, Demand Spending
Voters in a Chicago suburb voted earlier this year to request ambulance service for their neighborhood. But when it came to paying for it through an ambulance tax, they voted no. And once again yesterday, they have voted against a referendum for an ambulance tax.
As the Chicago Tribune Reports:
For the fifth time in two years, Beach Park voters rejected a request for an ambulance tax to pay for full-time paramedic services in the far north suburb, unofficial election returns showed Tuesday.
Fire Protection District Chief Paul Tierney said rejection of the emergency referendum means paramedic service to more than 15,000 people served by the agency probably would have to be abolished. "I would say there's a very real possibility that by May of 2006 the service could be entirely eliminated," Tierney said.
The department cut its two full-time paramedics after April's defeat of an identical measure. Ironically, voters approved a companion measure requesting full-time ambulance service.
This is a classic case of what economists call "free-riding". When individuals believe that there is a chance they can get a service without paying for it (or someone else paying a significant portion of it), who would blame them for not wanting to pay?
Unfortunately, this problem is widespread in political economy, and the view seems to be that if one group is free-riding off of you, then you should somehow be entitled to free-ride off of them in order to "even it out." Ultimately, this usually ends up hurting all taxpayers.
Why not avoid the free-rider problem altogether and allow the market to provide ambulance service to this neighborhood instead?
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