Many of America’s inner cities have faced solemn decline over the past 50 years, and presidential candidates have been promising to rebuild decaying urban centers for the past 50 years.
This year’s election is no different. Both Democrat Hillary Clinton and Republican Donald Trump have pledged to fix their battered inner cities, and for the first time since the 1980s, states like Michigan and Pennsylvania — which are home to many economically depressed areas — are considered winnable by many political analysts.
One reason Trump has had more success than other GOP candidates in states with struggling urban areas, especially those that have lost significant manufacturing jobs over the past two decades, is that Trump has pledged to reform or end many U.S. trade agreements, including the North American Free Trade Agreement (NAFTA). Many workers in Illinois, Indiana, Michigan, New York, Ohio and Pennsylvania blame poorly designed trade agreements and unfair trade practices with countries like China for the economic decline that many of these aged, manufacturing-dominated states have experienced.
Trump has not only promised to change many trade agreements, but has also announced the imposition of tariffs or other punitive measures on countries that employ currency manipulation to weaken the position of American manufacturers.
Clinton also gained a significant following in the Rust Belt states with her promise to punish many companies that decide to leave the country,“exit tax”and her planreduce some taxesand provide tax breaks for some companies that make long-term investments in economically disadvantaged areas. Clinton also says she will raise taxes on businesses and wealthy individuals and employ the money to pay for more government-backed infrastructure projects.
While overhauling trade agreements and introducing tax incentives for businesses in city centres could be beneficial, if designed and implemented properly, much more could be done to transform currently dwindling urban areas into hotbeds of innovation and economic activity.
The first step to implementing positive and lasting reform in urban areas in the United States is to radically change the failing customary public education system. In its current form, children from penniless and middle-class families are forced to attend the public school that is closest to their home, regardless of the quality of the education or safety. If all children had the freedom to attend the school of their choice, unthreatening, well-run schools would thrive, and failing schools would be forced to reform, change leadership, or close so that more productive schools could open in their place.
But how can penniless and middle-income children afford to pay tuition at other public schools or tuition at private schools? Parents should be able to employ an unrestricted, publicly funded voucher that could be used to cover education-related expenses, including tuition and homeschooling. The voucher would cost states and localities as much or less than the per-pupil funding they already provide, but it would give parents and students the freedom they need to find the right learning environment.
Voucher programs, as well as many other school choice programs, have been extremely successful in countless places where they have been tested, andnationwide surveyA 2015 survey of parents conducted by Brilliant Corners Research Strategies found that 70 percent of African-American parents support such a plan.
Trump has repeatedly said he supports school choice, but has not outlined a detailed education plan.ClintonOver the years, she has moved away from support for many school choice programs and has stated that she does not support vouchers or any “substitutes” for the customary public school model.
A second way to improve downtowns would be to encourage businesses to invest in struggling urban areas. Clinton plans to do this by cutting taxes on corporate profits for certain industries—not yet identified—that invest in long-term projects in depressed economic areas, while raising taxes on other businesses and short-term investors. This strategy could aid some downtown areas, but only at the expense of surrounding regions that will not be able to compete with the tax benefits offered by the federal government to those who invest in urban centers.
A much better strategy would be to encourage American companies to introduce about2 trillion dollarsare currently located overseas to avoid the high corporate tax rates at home. The best way to accomplish this is to allow these companies to employ their money in America without having to pay taxes on it — provided they invest the funds in certain low-income areas and agree to hire a certain percentage of their workers from the communities that currently exist in those regions.
While some, including Clinton, have called the strategy a form of corporate welfare that helps billionaires, a far better solution would be to pump funds into inner-city communities rather than stash them in offshore bank accounts.
Trump said he wants to encourage businesses to bring $2 trillion back to the United States, but added his administration will impose a 10 percent tax on dollars coming back into the country.
While these are just two of many ways to improve America’s inner cities, they are two key steps toward improving urban areas that have long required unique and significant policy changes.
Justin Haskins(jhaskins@heartland.org)is editor-in-chief of The Heartland Institute.
