Canarsie Pol: Taxes for a Bedroom Community

A bedroom community requires an unusual taxation strategy.  The backbone of this island's tax revenues will be residential, and I need to structure my tax plans around that economic backbone.

Also note that specialist cities (with a commercial, high-tech or residential focus) have a more fragile economy, so if you're still relatively new to the economic gameplay aspects of SimCity 4, it's better to start off with a well-rounded city using a diverse RCI portfolio.

While for most city tiles, taxation relates to controlling growth stages in the game, in the case of a bedroom community, most of the initial taxation choices are long-term:

1. 20% tax on agriculture (I-A), and dirty industry (I-D), which are both highly polluting – the bane of successful residential development.
2. Surprisingly, 20% tax on high tech (I-HT), and 9% tax on manufacturing (I-M).  I am providing a scattering of manufacturing (I-M) lots, for the sole purpose of providing jobs to low income R$ sims, and attracting R$ sim tourist traffic on my ferries.  High tech (I-HT) is less effective at providing R$ jobs (possibly completely ineffective), so while high tech industry (I-HT) is very compatible with residential populations, it's very incompatible with my economic strategy for providing low wealth R$ jobs.
3. 7.0% tax on commercial offices (CO), both C$$ and C$$$.  While commercial services (CS$$) will comprise the majority of my commercial growables, and commercial tax income, the commercial offices (CO) are the largest employers in the game, and I want many C$$ jobs for R$$ sims, as both a tourist driver on my ferries, and to provide local jobs for my R$$ sims.
4. 9.5% tax on low wealth (R$) residential.  While it seems utterly unfair to tax low wealth R$ sims at a higher rate than medium wealth R$$, if I use a flat tax rate for both categories, I'll end up with a deluge of low wealth (R$) sims that are unemployed ... and no, they won't be happy campers!  

Even in a bedroom community, the game functions much better if there's some local jobs.

The one short-term growth stage aspect of taxation here is 20% tax on high wealth residential (R$$$).  There simply won't be jobs here for many high wealth R$$$ sims, especially in the early stages.  I'll experiment with lowering this to a 12% R$$$ tax later in the game, but I may find that something between 11.5% tax and 12.5% tax on R$$$, works better for allowing only a tiny influx of high wealth sims (R$$$).  I don't like the No Job Zots, and unemployed sims literally get depressed, affecting both long-term unemployment and crime levels.

Your advisors will probably complain about a 12% R$$$ tax rate, making dire predictions for the local economy, but you can verify the reality of those dire predictions using the Jobs & Pop and RCI Demand graphs for R$$$.  This Jobs & Pop graph shows steady R$$$ population.

This RCI Demand graph shows low positive R$$$ demand, high R$$ demand, and moderate R$ demand, perfect for the bedroom community I'm building on the Canarsie Pol island.  Note that demand relates to many different economic factors and cyclic fluctuations, morning commute times for individual sims, and availability of jobs at the same wealth level.  Changes in taxation can also take several sim-years to show up on the RCI Demand graph.

WARNING: When playing with taxes, don't save the game.  I get the impression that residents, commerce, and industry alike, don't like frequent tax changes.  Run the game for ten sim-years on Cheetah speed, as a simulation to discover the right tax levels, then exit without saving, and go back to the previously saved game to set your tax levels without inflicting all those tax changes on your hapless sims.  

From a purely fiscal perspective, keeping unemployment down is vital.  Unemployed sims pay no taxes.  Increased crime impacts commercial growth and commercial productivity, and can even lead to dilapidation and abandonment of commercial lots in the game.

From a cosmetic perspective, unemployment leads to dilapidation and abandonment of residential lots, too.  Not pretty!  

Further taxation fine tuning may involve either reducing the medium-wealth R$$ tax rate, somewhere between 8.5% tax and 9.0% tax on R$$, or further increasing the R$ tax rate, somewhere between 9.5% tax and 10.0% tax on R$.

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Here's another one of my other posts that covers taxation strategies for a more typical city tile, through multiple growth stages, literally a recipe for happy sims!