“The true foundation of republican government is the equal right of every citizen in his person and property and in their management.” –Thomas Jefferson to Samuel Kercheval, 1816.
The rationale for the property tax is a good one in that it allows for the funding of legitimate duties of the local government like the fire department, law enforcement, public infrastructure like roads and government buildings, and public education. However, while the ends are good the means are not. There exist at least three fundamental reasons why the property tax is wrong.
First, the obligation to pay taxes on property over an unlimited period of time means that you are essentially paying “rent” to the government for your land, your house, your business. If the government can and does make you pay rent for your property than just how much do you really own it? If you fail to pay the property tax the government may then seize your land and take away the very roof over your head. In effect, the government retains the right to own property.
Secondly, shelter, like food, is a basic human need. We don’t tax groceries because this added financial burden places an obstacle in the way of a basic human necessity. How cruel would it be to allow a family to starve because they could not afford the additional tax on food meant to fund the very public services meant to aid them in life? Obviously, this example is extreme but it illustrates the underlying principle. Likewise, shelter is a human necessity and, while it may not be necessary to own property in order to have shelter, even rent factors in the cost of property tax. Also, while it is true that much of the property taxed is for commercial use, most people only own non-productive property, namely, their home. No matter how valuable a person’s home may be it does not necessarily reflect ability to pay the tax imposed on it. Yes, property value and the wealth of the owner share a correlation but just because a house has value doesn’t mean the owner can pay – one must look no further than our retired elderly to find an abundant example.
Thirdly, the property tax, because it is a debt that can never be paid off, looms as a constant threat to family legacy. It inhibits family inheritance of “the homestead” if ever one generation should fall on bad times and be unable to pay. Thus, it increases the instability of the family economy. Furthermore, taxing real-estate based on reassessments of the property value often leads to a tax increase because the property has a higher estimated value than it did at the time of purchase. However, this means nothing to the home owner unless they sell their home for a net gain. This results in a financial punishment for the family that is resolved by selling their home, thus promoting a “nomad” mentality in which families may uproot multiple times in a lifetime and real-estate rarely stays within the family from one generation to the next. This undermines the idea of the family homestead and establishing a stake in life for the benefit of future generations.
Instead, we should replace the property tax. Even a local income tax would be better. However, I think that the best solution would be local consumer taxes. Conceivably, someone could grow their own food, generate their own energy and so on in order to be totally self-sufficient and thus avoid paying such a tax – thereby freeloading onto the system. However, a system that allows for the occasional freeloader is far better than one that allows for the outright destruction of a man’s livelihood. After all, isn’t the object of taxes supposed to be the advancement of the common good?