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Should the US have a Natural Disaster Tax?

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Started 4 years ago by Brewmaster
Latest reply from cr0m

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Brewmaster
Portland, OR
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Not sure if I'm going to come off as insensitive for suggesting this, but after watching some footage of the SoCal wildfires, I actually found myself a little annoyed.
Here you have people who are building houses in areas where wildfires have reclaimed land every few years for millenia. Every news story looks the same. The camera shows some amazing pictures of wildfires consuming houses (on land where fires have surely burned many thousands of times before), and then the news anchor comes on and says, "The president has declared the a Federal Emergency in the area which allows federal funds to be used for recovery."
Obviously hurricanes, earthquakes, and floods are random, but only to an extent. Ohio will never be subjected to damage from hurricanes or earthquakes, and the small floods we have here every couple of years pale in comparison from a financial loss perspective. So why do we pay the same amount of money into the federal disaster recovery pot as Californians and Floridians do?
I'm proposing that high risk areas pay a Natural Disaster Tax. Every spot in the country has a natural disaster risk assocated with it. If you decide to build your house on the side of a cliff that is mudslide prone, you pay a tax. If you decide to build your house in an earthquake zone, you pay a tax. If you build your house in a floodplain, you pay a tax. The collected Natural Disaster Tax revenues would go into a pot that helps victims recover, communities to rebuild roads and infrastructure, and pay for tax breaks that are currently given to disaster victims.
We already do this to an extent with insurance rates (Floridians are whining about expensive insurance after the last couple of hurricanes), but this would cover the federal aid portion of things. Thoughts?

Posted 4 years ago #
shroud
Polaris
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I understand your reasoning, and I see where you're coming from... but yeah, a lot of folks would call you insensitive.
Pretty much everywhere is prone to SOME kind of natural disaster. Yes, some areas are definitely more high-risk than others, but I don't know that regulating that via a government tax (as opposed to regulating it with higher insurance premiums) is really the way to go.
Central Ohio is prone to floods and tornadoes. Thankfully, recently most of the nasty flooding has been in more rural areas, which while horrible for the folks living in those areas, has made for a much lower total cost. And we've had a couple nasty tornadoes, but nothing that bad. But that doesn't mean they couldn't happen.

Posted 4 years ago #
Brewmaster
Portland, OR
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I guess my logic is that insurance companies don't provide assistance outside of cutting a check for your house and possibly putting you up in a hotel. The feds spend billions in relief that isn't covered by higher insurance premiums.
And to compare our dinky floods and tornadoes to coastal hurricanes, earthquakes, and wildfires from a financial standpoint isn't an even match. I'm ok with paying a small portion to cover the unlikely event that a tornado strikes downtown or the Scioto crests well over the 100 year floodplain, I just think that Floridians and Californians should have to pay waaaaaay more than I do.

Posted 4 years ago #
myliftkk
Columbus, OH
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Probably because the bureacracy necessary to implement such a targeted federal tax would be vastly more than just to level a similar rate across the board. Plus, people who probably litigate such a tax to death because it takes the opposite approach as insurance in that it doesn't attempt to spread risk out into the widest pool available. Rather than tax people, why doesn't the federal government stop giving highway and infrastucture money to cities that push development in disaster areas? If there aren't roads/water/sewer/electricity moving out into these areas, people wouldn't be buying their houses out there, or, tax the developers themselves, who are the ones building the houses. Punishing the individual after all this other infrastructure work has been done is like trying to shut the barn door when the horse, cow, sheep, and goats have all left the ranch.
Btw, more people were whining in Florida because most insurance companies pulled up and left the state after the hurricanes. Many smaller ones of them also folded because of the losses where they issued way too many policies to people who wanted to live beachside. Florida's problems are poor insurance and development judgement, but as far as government is concerned, they've had the best disaster relief expertise in the country for a decade or more.

Posted 4 years ago #
Brewmaster
Portland, OR
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As far as I can tell, Florida's new insurance policy is, "Don't worry, taxpayers in Ohio will bail us out." :evil:

Posted 4 years ago #
Ndcent
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Less tax, more personal responsibility.

Posted 4 years ago #
jwing
Clintonville / Beechwold
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Brewmaster wrote As far as I can tell, Florida's new insurance policy is, "Don't worry, taxpayers in Ohio will bail us out." :evil:
OK - now you have achieved maximum insensitivity. :wink:
Actually Brew, I like this idea. After all, it is the people that are choosing to develop in these risky areas.
I do agree that the best idea would be to not develop in disaster areas. Or even fix the disaster areas so they are safer (don't ask me how). But if people, cities, businesses, etc are willing to take the risk, they should be prepared to pay the price.

Posted 4 years ago #
Daz
Tweeting about some totally unimportant event
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All I can say is, since these fires hit Santa Barbara county, you can BET YOUR ASS that the clean up and relief will be thousands of times faster than Katrina.
It's not a black and a white thing, it's a rich and a poor thing.

Posted 4 years ago #
drew

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Couldn't agree more with the original poster's sentiment, at least in the abstract.
When I lived in Santa Cruz, Ca, heavy rains were causing houses to slide off the sides of mountains everywhere. A couple of my co-workers lost houses. I asked them, "did you know that might happen?" and they replied, rather annoyed, that of course they knew it was a possibility but everyone does it.
In other words, everyone living in high-risk areas knows that they'll get bailed out. They just hope they don't have to deal with the inconvenience of losing their place temporarily.
Generally speaking, seems to me that there are some places that just shouldn't be densely inhabited. Phoenix, SD, and LA are constantly worried about what they'll do when the Colorado river dries up. Add fires and earthquakes, and... now why are the real estate prices so high out west?
As for the question of how to distribute tax responsibility properly, that's where it obviously gets complicated. Probably the easiest thing to do would be to make rescue and recovery efforts the responsibility of the states vs fed government, so that each state's taxes for such things would be based on their relative risk.

Posted 4 years ago #
BetsyB
Westgate
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Drew wrote Couldn't agree more with the original poster's sentiment, at least in the abstract.
When I lived in Santa Cruz, Ca, heavy rains were causing houses to slide off the sides of mountains everywhere. A couple of my co-workers lost houses. I asked them, "did you know that might happen?" and they replied, rather annoyed, that of course they knew it was a possibility but everyone does it.
In other words, everyone living in high-risk areas knows that they'll get bailed out. They just hope they don't have to deal with the inconvenience of losing their place temporarily.
Generally speaking, seems to me that there are some places that just shouldn't be densely inhabited. Phoenix, SD, and LA are constantly worried about what they'll do when the Colorado river dries up. Add fires and earthquakes, and... now why are the real estate prices so high out west?
As for the question of how to distribute tax responsibility properly, that's where it obviously gets complicated. Probably the easiest thing to do would be to make rescue and recovery efforts the responsibility of the states vs fed government, so that each state's taxes for such things would be based on their relative risk.
I was recently discussing homes built on the Outer Banks in North Carolina with my dad. I never realized that you cannot insure those homes due to the chance of being wiped out by a natural disaster. Why are we (the goverment) bailing out people who voluntarily choose to live or own a home in an area such as the Outer Banks knowing full well the high risk that their home may be destroyed. I am not sure this logic can be applied to every situation but it could definitely apply to people who build their home on the hillside where mud slides are prone or on the coast line and your house gets flooded. It should be called the common sense law.

Posted 4 years ago #
Ndcent
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BetsyB wrote Why are we (the goverment) bailing out people who voluntarily choose to live or own a home in an area such as the Outer Banks knowing full well the high risk that their home may be destroyed.
Good question. I often wonder why we (the government) pay people that don't work.

Posted 4 years ago #
shroud
Polaris
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Looking at the FEMA 2007 federal disaster declarations, by FAR the most common type of disaster declared there is "Severe Storms and Flooding" or "Severe Storms, Flooding, Tornadoes". States covered include Ohio, North Dakota, Minnesota, Nebraska, and other places you might normally think of as "safe".
On the historical list of disasters declared by state, Ohio ranks 9th on the list, AHEAD of disaster-prone areas such as Hawaii and Mississippi. The top 3 on the list are, in order (and somewhat predictably):
Texas
California
Florida
It's also worth noting, however, that California and Texas are the #2 and 3 largest states by area, and the #1 and 2 largest states by population... so that alone would make them statistically more prone to disasters.
The number I'd REALLY like to see is dollar amounts paid out, as that would definitely skew things more towards the kind of mega-disasters you're specifically thinking of.

Posted 4 years ago #
Brewmaster
Portland, OR
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shroud wrote The number I'd REALLY like to see is dollar amounts paid out, as that would definitely skew things more towards the kind of mega-disasters you're specifically thinking of.
That's the important one. It probably takes hundreds of tornadoes and floods to equal one Cat 4-5 hurricane from a $$$ standpoint.

Posted 4 years ago #
Donut
Cincinnati
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one thing to consider: do any of these states also provide revenue for the country more than we do? In other words, sure we pay California more for disasters, but does California also already tend to pay higher taxes? Lots of fairly wealthy people paying more income tax, not to mention more big-dollar industries out there, from computers to movies. How much more money does California make that goes to the Feds than Ohio makes?
In other words, is California (et al) already paying for it in many ways?
If we say "we won't help you out in emergencies," beyond being selfish and heartless, are we willing to also not accept any revenue from business there, or worse pay some sort of import tax for California goods?
I'm not sure that considering the States as being so separate is a great idea.
As for the remarks about paying people who don't work, I'm just going to ignore those.

Posted 4 years ago #
Brewmaster
Portland, OR
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Donut wrote I'm not sure that considering the States as being so separate is a great idea.
It's not really about considering states as being separate, but rather to get people who want to live on an eroding beach, in the floodplain, or the side of a cliff to pay for thier rescue services. They chose to live in an area where mother nature is particularly harsh, but don't want to take accountability for it.
Ideally, you could localize it to a very fine point (like with 100 year floodplains), but in some cases (hurricanes for example) at-risk counties could be used as the qualifier.
I could also see a tiered Disaster Tax "Bracket" system being used where the most catastrophically at risk people would pay a higher rate, while low-moderate risk people (tornado alley for instance) would pay a lower rate...but still pay.

Posted 4 years ago #
Coremodels
Really close to Explorer's Club.
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Daz wrote All I can say is, since these fires hit Santa Barbara county, you can BET YOUR ASS that the clean up and relief will be thousands of times faster than Katrina.
It's not a black and a white thing, it's a rich and a poor thing.
You nailed it...
http://www.csmonitor.com/2007/1025/p01s02-usgn.html
FEMA and other US agencies seem to have improved their emergency response since the 2005 Katrina fiasco.

Posted 4 years ago #
Donut
Cincinnati
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I live in the ghetto, which means statistically there is more likely to be violence in my neighborhood. In fact someone was recently shot to death over a car jacking. Should I pay more taxes in case the police are needed?
I am just playing devil's advocate here. I get what you're saying, and while I cringe at the idea of "bailing out" someone who has a house that is worth far more than I will ever make, I'm not comfortable making broad claims or assumptions about the people affected by disasters.
As an individual, what if a tornado landed on your house? Sure, the total cost is not that much, but it still sucks for you.

Posted 4 years ago #
Brewmaster
Portland, OR
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I'm clearly outmatched by someone with a kitty cat avatar. You don't know how painful that is to type.
I guess I'd say that crime can happen anywhere and public safety is a vital function of the local government. If you want to add federal assistance due to riots into the "natural disaster" tax structure equation, I'd concede that point. ;)
And a tornado landing on my house, while being quite devastating to me, is 1) less costly than a Cat 5 hurricane making landfall overall, and 2) less likely to hit my house than a hurricane hitting someone's in Port St. Lucie, Florida.
Risk = Probability x Severity
...or something like that.

Posted 4 years ago #
gramarye
In Exile
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Well, one solution would simply be to decentralize disaster management--and funding--to the state level, meaning make it clear that Louisiana and Mississippi and Florida would have to deal with the hurricanes that they face, California has to deal with its earthquakes and wildfires, etc. Of course, the whole "not a federal government problem" response was partly what got Bush in so much trouble with Katrina: no matter how much you might wish that people looked elsewhere for disaster relief and recovery, if people are looking to the federal government, then the federal government is thrust into a position of leadership whether it wants the job (or can handle the job) or not.
I think Donut's counterpoint is good. There are some things that we really are in together.

Posted 4 years ago #
Donut
Cincinnati
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good points.
Honestly, I don't have much of an opinion on this - or rather I have thought about this and can see both sides without really feeling strongly one way or the other.
Also, the image of the person who moves out there is valid, but what about someone born in the area and who is unable to afford to move away? I know San Diego is a very wealthy area overall, but when I was there I'm pretty sure I saw poor people living there too. Where do they fit? On the one hand, they are more likely to live in the urban area of San Diego proper than in La Jolla for instance, but.... I don't know.
I guess I just don't like the idea of saying, "sorry folks - you're screwed" to a whole bunch of people I don't even know.

Posted 4 years ago #