How Can Increased Tax Improve a City’s Development

Abstract

Taxation is a huge help in the development of city; however, the help is not always apparently visible. In this article, the benefits of taxation have brought to urban development will be analyzed in detail. The purpose of this paper is to reveal in what aspects can tax revenue help cities to better develop. To further address the topic, this article examines the benefits of higher taxes for urban development in three parts: The first part focuses on how higher taxes can reduce urban overcrowding and, by doing so, mitigate the social problems associated with urban overcrowding. The second part examines how raising government-owned or private transportation taxes can help reduce the cost of maintaining roads and provide valuable funding for basic infrastructure, which also helps reducing the crime rate of the city. The third part describes how higher environmental taxes have stimulated the generation of clean energy, reduced transportation costs and inputs for cleaning up urban pollution. The final part focuses on how tax revenue can provide the cities with capital to survive and recover from unpredictable economic and natural crisis. This paper demonstrates that tax revenue has been successfully improving cities’ development in the four aspects discussed above by reviewing previous studies on the subject, and presenting data related to the development of various cities.