"Pinal communities set to lose millions as rental taxes banned"

 I recently saw this item in the news that Google thinks I should know about.

 The purpose of this article seems to be to set forth the arguments against recent legislation that banned rental taxes in the state of Arizona. The main concern seems to be that municipalities will lose income:

“As with all General Fund revenues, this money is then used to fund core town services such as Police and Fire protection,” the statement read. “(W)e will continue to evaluate this cut and any other reductions to local revenues to determine the impact on town services and how best to allocate these resources once this law becomes effective in 2025.”

 In other words, if municipalities lose money, services that taxpayers value most, such as fire and police protection, might not be able to be provided!

  Furthermore, the ostensible motive for eliminating rental taxes is to give renters, who may be young and poor, a break. But it turns out that this motive may be wrong-headed:

"But she [Governor Hobbs] said there is no “enforceable mechanism’’ to ensure that landlords, who remit the tax to cities and towns, actually would pass along the savings to their tenants."

No "enforceable mechanism." Doesn't that mean that cheaper rents is just pie-in-the-sky?

Hobbs may have gone through the education system and graduated with a Master's in Social Work without ever having been exposed to the concept of market forces. They function as an organic outcome of the aggregate of everyone's consensual agreements to exchange property. So they don't have to be "enforced," like legislation.

What this means in terms of rentals is that a landlord seeking to reduce vacancies has more incentive to lower price. This may not be enough "ensurance" for politicians and voters, but legislation that raises costs definitely affects ROI, which is a big factor in whether or not something gets built. But I guess a lot of people in Arizona don't actually want anything to get built? 

"And Senate Majority Leader Mitzi Epstein, D-Tempe, said there was a more practical problem. She said even if landlords no longer charge the tax, they will simply raise their rates knowing that’s what tenants are willing to pay."

 Landlords do indeed want to charge all that the market will bear. But the downside of raising rents is vacancy. Successful landlords fear empty properties as much as they lust after higher rents. It's a judgement call, and landlords who judge correctly do well. Landlords who charge more than the market will bear don't do so well. Market discipline, it's also called. The larger and more un-hampered the market, the stronger the discipline.