The NYT Comes Out Against Taxes


…Of course it's one that they've made up, but it's a start.

An NYT article today discusses the "ghetto tax," a term employed by the Brookings Institution to mean the added insurance costs of living in a high risk areas, which frequently are correlated with poor socioeconomic conditions.

If you live in any of the cities in which auto theft is prominent, you're probably going to end up paying more because of it. That's just how car insurance works. It's the same principle that says a speedy sports car will cost more to insure than a safe family sedan. And if you purchase a vehicle with a high theft rate, you're probably going to end up paying for that, too.

Part of the problem, the study found, is a discrepancy between the poor and the middle class in consumer skills and mobility: people who comparison-shop, especially on the Internet, tend to pay hundreds less for the identical car than those who walk onto a city lot and buy.

I'd go so far to say that poor consumer skills are much of the problem. Nevertheless, the notion of a "ghetto tax" is wrong, and the implications are dangerous. Even if consumers get bitch-slapped by the invisible hand, that's still the free market at work.