The reason that I did not move there was because of all the things that you get with no taxes. There were holes big enough to swallow a Volkswagen in the roads. The sidewalks were busted up. Store after store was out of business. Many streetlights were burned out. Many roads within the town were unpaved. It was like visiting a vibrant ghost town. We sat with our prospective neighbors across the street. She was a nurse. In the conversation, it became pretty apparent that the physicians, nurses, pharmacists, attorneys, were the only people in town who had studied after college. There was no live music scene, a difficult thing to abandon in Austin. There was no entrepreneurial environment, unless selling 100 year old rusty horse shoes and kerosene lanterns to tourists, or starting a beauty salon meets your criteria for entrepreneurial.
I like the idea of a $50,000/year job with taxis, restaurants, music, roads that don't tear up my car, and $10,000 in taxes more than I like the idea of no taxes, $20,000/year job, and no amenities.
I believe it's moreso that way because the area is simply poor; they should still have taxes, but because business is bad, the city likely doesn't generate enough revenue to fix all the problems mentioned. I don't mind that so much, personally; to get the taxis, restaurants etc., you would have to live in the city, where business is great and so the city generates more tax money that it can spend on whatever. My only problem with this is the amount of people crowded into one area; I'd rather be poor and in quiet, open areas, than crowded in luxury, but that's just me.
The question is, if the city generated no taxes, what would happen to the roads and such? I wager, if business is mighty in this city, the businesses would have a vested interest to keep the roads in tip-top shape, for that's the golden gateway to customers; people may avoid driving to certain establishments to avoid the poor roads, or worse, people might leave the city, for other cities that are taken care of; a healthy infrastructure is very much in the interest of business, except when government takes the burden, and they no longer have to worry about keeping the roads healthy, but still have to pay for it. In an area where business is poor, there's just no money or time to worry about the roads, and they fall into disrepair; as is the case with government, if the city cannot generate enough tax revenue through businesses, they still cannot pay the road workers to maintain their roads, and they fall into the same situation, as you've mentioned above.