Abolish the Property Tax!

Once upon a time, the property tax made some sense as a way to raise governmental revenue. Most property was agricultural, and generated wealth, in terms of animals, crops and cash. But that was long ago. Now, agricultural land is a tiny fraction of our economy, and wealth is more properly measured in cash income. The ability to pay taxes depends upon one’s income, not upon one’s holdings. That is why income tax is paid on stocks when sold, not on their value when held, for example.

It is important to distinguish between the need to raise governmental income, and the means to that end. In this, the property tax no longer makes much sense, and continues to produce many pernicious and unintended consequences.

The elderly, on fixed incomes, see their assessments and taxes rise, based upon the value of neighboring homes, which are sold. Their ability to pay typically does not increase, as they get no income from their home, and their demand upon services does not increase either. Why then, accept continued property tax increases, which force people with fixed incomes to sell their homes?

Farmers see their property taxes increase, not because of anything they do, but because assessments often are based upon the possibility of a more valuable use, eg, converting the farm into a subdivision.

Landlords experience the perverse result of increased property taxes, if they invest in property improvements.

These are extreme examples, perhaps, but everyone has felt the pinch of rising property taxes as unfair, as they are asked to pay more on an assessment of expected value, rather than upon real income.

The property tax is an unfair means to raise governmental income: abolish the property tax, and base state and local revenues upon the income tax, which most fairly tracks the ability to pay.