Because suburbs, despite lower taxes - often generate more tax income. Where I live the city itself has a large part of the downtown owned by the county, state and federal government (it is the state capital, plus various federal offices that all cities have). Half of the valuable downtown pays zero tax to the city, yet the city is still maintaining infrastructure for those lots. That is in addition to a few churches that pay no tax in the US, and a bunch of parks. Thus the city has the high value core which isn't paying for itself, and then the lower value ring around the core that has lower property values to generate tax income from. If they can annex a suburb just outside that with higher values the city gets more money (with their higher taxes), and probably can reduce the tax rates for everyone (still a tax increase for the annexed suburb!)
The evidence strong towns presents is not convincing. They take rural towns far from cities and claim that towns issues represent suburbs. They cherry pick suburbs that have issues and claim it represents all. Nowhere do they apply statistical or scientific rigor.
Suburbs have existed for more than 100 years. They have rebuilt their roads many times. They have installed modern things like telephone, running water and so on over the years.
Strong Towns is talking about tax income vs tax expenditure efficiency (dollars received vs benefits realized). It is easily possible that receiving more money does not necessarily correspond to improved quality of life, if those funds are spent on projects that don't enable local prosperity.
