As part of a series prepared to acquaint small community officials with information on the latest community related research findings at the University of California at Davis, this monograph explicates the way in which tax structure, rural development assumptions, and even rural development policies and subsidies contribute to the inequities found in rural America. Among the major points made are: (1) the tax structure is such that corporations can derive investment subsidies without benefiting the community, for they can locate in an area without hiring local people, circumvent local tax laws, and delay tax payments; (2) property taxes are hardest on the local home owner, because the property tax is regressive and does not cover intangibles; (3) programs for rural expansion, recreation developments, and second home takeover result in loss of agricultural lands, inflated prices, and adverse environmental effects; (4) the capital gains tax encourages reckless land use planning by putting a premium upon assets held for a minimum time; (5) agricultural subsidies perpetuate income inequities, for non-farmers in large income brackets find it profitable to farm at a loss so as to gain a tax shelter, thereby presenting unfair competition to farmers farming for a living; (6) research has been technologically, rather than people, oriented and has contributed to the displacement of human beings. (JC)