City of Middlevale Negotiation, Research Paper Example
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The city of Middlevale needs to provide fire and emergency services to its residents and to those living in its periphery. However, it is faced with budget issues to make possible the program. It has hired experts to redraw the city limit. This has to be approved by the state legislature as an amendment to the city’s charter. Under this arrangement, the residents of the unincorporated areas will receive services from Middlevale but at a cost. They will have to pay taxes on their land and city sales taxes on all purchases made at their businesses. The residents of Middlevale pay these taxes. The nearest fire station and hospital are many miles to the east of the outskirts to be incorporated into Middlevale. Another problem is that most of the residents of the unincorporated area are earn low income and are elderly citizens who moved in this area to escape from Middlevales’ taxes. A cost benefit analysis on the project shows negative and positive impacts of the project on the people. It also shows the socio-economic effects likely to be faced by the project.
Increased Cost of Living in the Area After Annexation
According to Newman, People will often try to live in places where they can maximize their standards of living. The project is certain to increase the cost of living in the entire area after annexation. Taxes distort economic decisions directly or indirectly. When land, businesses, and buildings are taxed, people may be discouraged from engaging in constructive activities. Efficiency is thus penalized because of excess taxation. The value of taxes may not be directly proportional to the likelihood of fire and emergency incidences. In addition, most of the residents living in the periphery are the retired elderly and people of low economic status.
The residents living in the unconsolidated areas live low quality and cheaper lives. It is likely that they have more children per household compared to an individual household in middlevale. Introducing drastic measures to tax them in equal proportions with the people of middlevale may subject them to absolute poverty, as they may not realize the direct and long-term impacts of the taxes on their lifestyle.
Annexation may not take into account the location of the land and its proximity to major buildings or shopping complexes. Uniform economic decisions on people of different economic capabilities weigh down on the poor heavily. Taxes on land may however improve the economy of the areas to be incorporated. This is because it will attract investors and help open up the area creating more economic opportunities (Newman 100). It may actually reduce population sprawl into middlevale. It also minimizes the speculative element on land pricing leaving more money into productive investment hence stabilizing the economy. In an attempt to keep the economy of the entire area stable, the value of land must be calculated fairly.
Quality of Services Delivered Based on Cost to the Citizens
The low-income families living in the outskirts of middlevale already experience economic isolation. Their cost of living increases based on where they live. They also have few choices on where to spend their limited resources. These captive consumers pay high prices for inferior goods and services compared to their suburban neighbors (Kemmerling 96). Taxing their businesses is certain to increase these costs and quality of goods and services.
Inadequate financial resources to spend on private health care and insurance means that the unemployed lead less healthy lifestyles. In addition, the children from these households may have their education quality compromised as parents squeeze their income to meet the many demands. Upon entering work, these children realize that they have fewer skills than average hence are likely to miss employment.
With the increased taxes, the unemployed will obviously encounter decreased standards of living as their income is reduced. They will have less disposable income and less purchasing power. Taxes on businesses may also lead to laying off some employees. This can lead to a negative multiplier effect. The unemployed individuals will not be able to spend, as they need to. Local businesses may suffer due to the job losses reducing the sales and purchases as well.
Taxing the poor exacerbates poverty further. Taxes may appear fair and justified but may have punitive effects on the poor exacerbating the initial conditions that pushed them into periphery areas. Taxation policies have a strong correlation with variables such as infant mortality, early mortality, obesity, crime, and high teen pregnancies. Offering a uniform federal insurance policy might eliminate many of the imminent differences (Hutchinson 45).
The Effect of the Net Taxes on Property Values
Taxes on land target the entire combination of land, buildings, and the unimproved sites. Property taxes are assessed for business property taxes, real property, manufactured structures and floating property. The taxes paid are based on the valuation made by the assessors. These taxes must also be high enough to raise enough revenue without causing abandonment of the land. This may be difficult to achieve as most residents in the periphery are poor and with no stable income. They may be pushed further to other periphery areas and their place occupied by new people escaping from the busy and expensive life in middlevale town.
The net taxes will give a multiplying effect on all aspects of the economy. Land is certain to appreciate in value as well as the cost of doing business. Rental rates as well as the transport rates will increase significantly (Lymer and Oats 32). The cost of providing the emergency services may not be justified compared to the overall impact of the taxes on the citizens. However, the fire and emergency services are vital in a society and a need among the residents of middlevale and their neighbors.
The stakeholders are the people who are impacted upon by a project directly or indirectly. They include the policy makers, the city council, the project implementers, the residents of middlevale, their neighbors in the unconsolidated area and finally the potential investors. Each stakeholder has special interests with the project.
The policy makers have the responsibility of ensuring that taxes are equitable and fair to people of different economical standards. They must also do valuation of the visible and the non-visible resources. The must device models to assess the level of taxes to be charged based on different socio- economic aspects on the unconsolidated areas. They also have a responsibility to the people who elected them and the citizens in general (Deekes 121).
The policy makers must also act in a way that will be seen to be fair addressing demographic, economic, and political aspects and interest of the area. The residents of middlevale pay taxes for the same services but enjoy better standards of living and opportunities compared to their neighbors in the outskirts. Taxing them on equal terms would only be unfair because the people living in annexed regions ran away from the expensive lifestyle because they could not afford it. The policy makers must thus address the unequal and diverse issues emanating from the decision of taxing the land and businesses just to provide fire and emergency services as this will provide significant effects to the economy and lifestyle of the people living in this places.
The city council has a duty to offer public services to its residents. After the laws have been amended, they should dispense the services in a proportionate manner by offering the emergency services when the need occurs.
The experts involved in the process must take a cost benefit analysis to assess the viability of the project in its present status and the need for relocation. The fire station is already too far from the annexed area. It will already take too much time for the fire crew to reach in time. This being the sole reason for taxing the residents, they must also assess the frequency of fire incidences in the area, their causes, and other alternative cost benefit measures.
The residents of Middlevale have historically been subjected to paying taxes; this has been beneficial to them as they enjoy better services from the city council. They pay taxes on their land and their businesses. Under the umbrella of their taxes, the residents of the unincorporated areas have been enjoying the emergency services. However, it is felt that a solution needs to take place to join the areas and have uniform policies govern them. It is likely that the residents living in the unconsolidated areas live low quality and cheaper lives. It is also likely that they have more children per household compared to an individual household in middlevale. The area to be annexed is also further from the contact point where the fire station is located. The residents of middlevale feel that taxes should be uniform and fair across board. However, policy makers are faced with the dilemma of ensuring equitable distribution of taxes and are left with two options on whether to separate the two regions or to merge them together.
The residents in the outskirts of middlevale have been enjoying a tax-free life under the cover of poverty. They are low-income earners and mostly retired elderly people. They detest the thought of being taxed and want to wage for demonstrations. Their concerns are normal as no one really wishes to pay taxes. They are however concerned about the impact this action will have on their income and culture. Nevertheless, they need the emergency services and must either stay without the services of merge with Middlevale. They can also split and stay independent but the government may not allow them to continue living without paying taxes.
The business people are afraid that the cost of producing goods will increase due to the taxes levied. This might put them out of business, as the residents in the outskirts are poor people who have no much money to spend. It may also contribute to unemployment as the business lays off some workers in an attempt to make more profits amidst the tax demand. To add to that the cost of land will also add to the many expenses by both the business owners and property owners. They may however marvel at the new initiative as it reduces losses by risks incurred by fire outbreaks. This can stabilize their income if the fire incidences occur on a frequent trend. They have the option of taking insurance policies or pay taxes to the local authority.
There is another group of potential investors. These are the business people who might marvel at the new idea, as it will reduce the likely hood of risk occurrence. These are the most important people as they can determine the future of Middlevale and its environs. Their decision can boost the entire economy by creating job opportunities. Their presence in the annexed areas can also cause an increase in the cost of living to people who have no source of income such as the elderly.
The final decision must be comprehensive as to include all of the stakeholder’s views and concerns. They may hold a stakeholders workshop and perform a needs and capacity assessment to determine the level of poverty in the target area. They should also do a cost benefit analysis on the effects of taking no-action at all and alienating the area and its residents. They should also consider the impacts off these taxes if the area is to be merged with the economy of middlevale. The stakeholders must also assess the potential productivity of the area, the mortality rates, and the life expectancy rates and aspire to determine the correlating factors. An analysis of special cultural factors and conditions among the residents should be assessed and the impact such a decision might have on the people’s cultural beliefs. Social analysis whether the group represents a minority that needs special interests, such as the homeless people, majority elderly, people who have absolute zero income should also be issues of concern. The areas must have political and economic interests to the government. The government may want to know its political interest on the area before peering to separate it from middlevale. They also must assess its current and potential economic benefits and the sustainability of the services afforded to this people.
Negotiation Strategy to Support the City Council’s Need to Annex the Adjoining Properties While Addressing the Concerns of the Stakeholders
The negotiation an approach geared at reaching an understanding upon a course of action by different groups. The council should listen to each side’s argument as to find a common ground. They should apply integrative negotiation whereby the different stakeholders’ views and arguments are incorporated and a decision reached. This will eventually create long-term gain to all the involved parties, as the goal is to ensure that everyone gets out feeling that their concerns will be addressed. This is not a majority wins approach but a holistic approach that is certain to breed results. The pitfalls to avoid in the planning and negotiation processes include; poor planning and failure to identify the real problem leading to the circumstances. The council and the policy makers should also pay critical attention to both the proponents and the opponents of the project.
How Do Ethics and the Culture Affect Your Decision?
Ethically and on culture-religious terms, the value of both improved and non-improved land owes largely to the community and nothing much to the individual owner. In addition, land is a common gift by God to all humanity hence it should not be subjected to taxation by the government.
The prevailing culture of exploitation and capitalism makes the choice between what is good or wrong very difficult. As much as taxes are collected to meet the public needs of residents, the special circumstances of the less privileged should be considered. Tax aggravated poverty may lead to substance abuse, crime, and domestic violence. These predicaments may be because of shocks associated with high cost of living and lost productivity. When negotiating between two groups of people, cross-cultural issues should not be assumed or overlooked as any other local issue Spilker, Ayers and Robinson 214).
Deekes, Deekes. Understand Tax For Small Business: Teach Yourself. Teach yourself. 2010
Hutchinson, Frederick. Taxing the Poor Deeper. New York NY: Center on Budget and Policy Priorities (1989).
Kemmerling, Achim. Taxing the working poor: the political origins and economic consequences of taxing low wages. Edward Elgar Publishing. 2009
Lymer, Andy & Oats, Lynne. Taxation Policy and practice. Fiscal Publications. 2010
Mcgee, Robert. The ethics of tax evasion. New York NY: Springer. 2010.
Newman, Katherine. Taxing the poor: Doing damage to the truly disadvantaged. California, university of California. 2011
Spilker, Brian. Ayers, Benjamin., &Robinson, John. Taxation of individuals and business ethics. New York: Irwin/McGraw-Hill. 2010
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