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> or is the high tax area drawing only high net worth individuals who have more time and money to invest in their children, leading to higher performing students in the same old schools?

I think the effect is large for schools in particular because schools are mostly funded by property taxes which are directly applied to the residents (either directly or via landlords).

I think the relationship between taxes and any given quality metric is going to depend greatly on the who collects the tax, who delivers the service and what the funding route looks-like. There's much less opportunities for waste if a town is using local tax revenue to pay for local services. It's state and federal taxes are at the biggest risk of being wasted on boondoggle projects and graft.

It's a complex problem. The higher a level something is done on the more overhead and the more opportunity for waste but it also has a homogenizing effect because resources are allocated centrally. Central allocation has big risks (if the central authority doesn't want the things you do you're screwed) and less opportunity for compromise (we will never have a federal gun control solution that results in SF, NYC and Alaska all being happy).

IMO the extra waste is not worth the homogenizing effect or the risk in the overwhelming majority of cases. Government decisions should be made and things should be done (including taxes to pay for those things) on the lowest level possible.

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