integrative city tax policy

a modest proposal:

Chicago (or your extremely race/class segregated city) implements a new tax plan such that for some proportion of your state income tax, you get money back if you live in an area with a median income different from your own, and you pay a little extra if you live in an area with the same median income as your own. The money back would work even if you don’t make enough to pay any tax in the first place.

year 1: I make 50k and my neighborhood’s median income is 48k. My state income tax goes up by almost the full rate (say it starts at 0.5%).

year 2: I am discouraged by this tax and by the fact that the rate has now increased to 1% (these are very rough numbers obviously). I move to a neighborhood whose income is substantially lower than my own. I now get a tax credit for 1% of my income. Also incidentally my rent is lower.

year 3: My friend who makes 25k takes a chance and gets a cheap apartment in a neighborhood with median income 50k. They get 1.5% of their income back in the form of a check from the state.

year n: segregation is substantially lower city wide, and systematic problems that we thought would always exist are suddenly just… disappearing? It turns out that when every neighborhood has voters and soccer moms speaking up for it, the city planners and bureaucrats can’t ignore a single one.

This policy would be implemented so as to be as revenue neutral as possible, or even revenue positive if an extra levy were to be placed on rich people who only live with rich people and refuse to move.