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Property Taxes

I hate property taxes. In fact, I probably, upon reflection, detest them even more than mere income taxes, for there is something more perverse about them. The income tax, however intrusive, presupposes only that a certain percentage of one's income is owed to the government, for the maintenance of public goods. The property tax, however, presupposes something more, and in this lies its monumental perversity, from which many particular evils flow.

Property taxation, it seems to me, presupposes one of two things. Either, first, that the properties upon which tax is levied generate income, of themselves, such that a portion of this is owed to the government for public goods and so forth. Except that, for the overwhelming majority of us, our property is simply real estate, which does not of itself generate income. To be sure, there is an expectation, now fading, that real estate can only appreciate, yielding income at the time of sale; but there is another term for this: capital gains. All of this is to say, then, that the property tax seems to presuppose something like feudalism: one held a piece of land in fief, and owed a certain percentage of its produce to one's lord. The fief generated wealth, and some of that wealth was due for the provision of public goods and services.

We, obviously, do not live under a feudal regime, though property taxation seems to presuppose such a regime. A feudal regime would also be a more distributive state, but we obviously do not live in one of those, which renders this tax doubly absurd to my mind: the properties which are taxed are neither income-generating, as they would be under feudalism, nor distributed as they would be under feudalism. So, despite the rhetorical appeal some have occasionally found in likening this tax to feudalism, it seems a safe conjecture that it is not a relic of feudalism.

Or, second, the property tax could be a sign of something else altogether - not a vestige of a long-discarded social order, but a sort of implicit rent payment: we are all renting, in this sense, from our local governments, with the tax representing the fee paid for the privilege of having shelter. After all, contrary to the feudal system, in modern rental arrangements, the only presupposition is that of use, as opposed to income generation. And it strikes me as perverse in the extreme to proclaim, even tacitly, that governments are universal landlords.

In closing, I note only that I have pointedly ignored the pragmatic rationales for property taxation: the ease of financing local governments and schools, and so forth. These rationales elide the many inequities of such systems of finance, and in any event, the use of a thing does not exhaust its significance. And it is the significance of property taxation, its symbolism, apart from the numerous pragmatic purposes and injustices (elderly folks losing homes because, on fixed incomes, they cannot pay the tax and, well, eat as well), that renders it manifestly perverse.

Comments (12)

But any taxation can be described in terms of perverse symbolism. Income taxes, for example, have always seemed to me to mean symbolically that part of the work you do is slave labor for the government. I could go on about that, but you get the picture. And that's pretty perverse.

Certainly the matter of old people's being unable to pay rising property taxes on a fixed income must be dealt with. But that could be done with a tweak. There would be all kinds of ways to do it--perhaps something to do with proving the nature and fixity of your income and getting a break on your property taxes. Michigan has something a bit like that where you get a partial refund of your property taxes depending on a mildly arcane formula that involves figuring out what percentage your property taxes were of your yearly income. Moreover, Michigan has a cap on the yearly rise in the taxable value of property--I believe the property has to be your principal residence--so that even if property values go very far up in your area, the taxable value of your home can't rise more than the consumer's price index for the nation or something like that.

One good thing about the connection between property taxes and local schooling is that it provides one of the last arguments that residents can at least try to make for some sort of local control of the content of local public schooling. Breaking the funding link breaks that last argument.

Any form of taxation can be characterized as carrying a perverted symbolism; I understand that, having heard the argument about the income tax many times, from the same sorts of libertarians who advanced the argument about property taxes. The problem I have with the former argument is that is seems to presuppose a consent-based theory of government: public goods or no public goods, one ought not be compelled to pay for them unless one has consented to do so - which I think nutty. It is of the nature of a public good that, because we benefit collectively from the provision of the good, we are obligated to pay for it; and it at least seems logical that we should pay a percentage of our income for its provision and maintenance.

This is scarcely to state that I embrace the income tax! The argument can be made that income taxation is not only contrary to the intentions of the Founders, which, while not dispositive, do possess the singular virtue of articulating a (more or less) coherent vision of limited, federal governance, which income taxation unbalances, but that it entrenches the mechanism by which republican government itself is undone: the linkage of faction and redistribution. Factionalism and public-private collusion are endemic to the human condition, and will occur under virtually any form of government, even communist systems, but income taxation has rendered possible something we can envision even now: a society in which a comparatively narrow stratum of society provides the preponderance of tax revenues, with various transfer payments distributed to the majority, and therefore feels entitled to call all the tunes.

So put me in the 'tariffs and sales taxes' column.

I'll take the point about local control of schools; but the reality is that local control of schools is, objectively speaking, an unprincipled exception from the general tendency toward combination, concentration, and centralization. Property taxation, if it is not merely a perversion symbolizing that government is a giant rentier, represents a social order in which a majority are independent farmers, businessmen, etc., whose properties generate wealth, and so can be taxed to sustain the community, including the schools. Obviously, we no longer inhabit such a social order, with one of the principal consequences being that our properties are simply residences, in a broad sense, enormous consumption goods - hence, the disposable, planned-obsolescence McMansion phenonomenon. We may decide, for various reasons, that property taxes are the least bad of a number of options, but we should be under no illusions that the localism we believe we secure thereby is substantial; indeed, it is barely even superficial.

I'll take "superficial localism" over "no localism." And I also tend to feel that it's important that local services--even police, fire, and roads--have a connection to local payment. For many reasons. If somebody tries to tell me it's "unfair" that Town A should have better roads, a better local library, or better police cruisers than Town B because Town A takes in more property taxes, I'm highly inclined to feel that he has just unwittingly given me an argument _for_ funding the roads and library with property taxes. Trying to give everybody the same quality of life and things--structuring taxation to make sure Town A's roads are at any rate *no better than* Town B's--seems to me highly perverse. Different towns should be different.

And I wouldn't be too quick to make the dichotomy "either we live in a feudal order and people generate income off their property or their homes are just huge consumption goods." I certainly know a lot of people, myself included, who have more of an attachment to place--beginning with our personal homes--than that.

But of course I'm happy to say that various taxes are going to be the "best of a bad lot." I'll say that about any of 'em.

One more point: I don't know what it is about income taxes, but golly if they don't seem to be used (more so as far as I can see than property taxes) for enormous numbers and amounts of things that no one could even begin to call "basic services." The sheer amount of money generated thereby and the sheer lavishness with which it is spent for whatever tom-fool idea occurs to the legislators--and this is true at the state level, too--is a part of what gives me anyway the feeling of "we're working as slaves for the government for such-and-such percent of the year." It's a case where a difference in quantity seems tightly tied to a difference in the nature of the thing. If we were talking about something on the order of a 1% income tax and the state and federal government got out of the arts, science, education, massive welfare, etc., etc., etc., business, it would make a big difference to the sense of enslavement.

It seems to me like taxes qualify more as rent for services than the slave labor or coercive theft meme that libertarians espouse. That does make the government symbolically a universal landlord, with the legislatures as property managers. With enough complaints, the property managers can be exchanged for a group more attentive to the renter's needs.

I agree with Lydia that property taxes are more directly tied to local control and influence, so from a conservative standpoint they should be a good deal more acceptable than income taxes and perhaps slightly better than sales taxes.

If it is important, even imperative, that locally provided public services be related to locally sourced payments - and it is - then one could easily have a local income tax. If your township or municipality does not, be grateful, as it could be like many here in Southeastern PA, which impose both onerous property taxes and local income levies. In fact, one of the problems here in SE PA, given the overdevelopment, and the excessive concentration of high-value businesses, is that the market values of residential properties are almost continuously bid upward, imposing property-tax burdens which handily outpace wage growth and the (understated for political purposes) official rate of inflation. Because the thing being taxed - property - has been decoupled from the ultimate source of the payment, this produces a sort of gentrification effect, which is undesirable and often invidious, on any number of levels. Regardless of one's opinion of their socio-economic class, and the economic structures which afford them such wealth, the resultant "only upper-middle-class professionals and members of the plutocracy need apply" sociology is far from laudable.

Of course, in my remarks concerning the implications - as I conceive them to be - of property taxation, I am not suggesting that those who differ lack any attachment to place. My remarks concern the functional and structural aspects of the system only. I've spent virtually the entirety of my life in this region of PA, under precisely the tax and property system I decry, and yet I have such an attachment to the region that I can scarcely conceive of living elsewhere.

Neither do I object to that "feeling of fiscal servitude" that the sheer weight of the federal income tax engenders; this is an aspect of what I alluded to in my last comment.

It's funny you should mention Pennsylvania, because I used to live there too (in Northeastern PA for a few years about 20 years ago), and I was going to bring that up spontaneously. Part of the problem is that we never seem to get the abolition of one tax along with the imposition of another. Instead, you always end up with both. So the poor who have no property and work some pitsy job trying desperately to make ends meet (sometimes in a high cost of living area, as NE PA is) are burdened by a local income tax on their measly wages, and the elderly who have property and live increasingly on a fixed income are burdened by a heavy property tax. I gather PA has nothing akin to Michigan's Proposal A to cap taxable property value. They should!

So one of my problems with saying anything negative about property taxes is the practical point that it could be so much worse for me in my present location. Next thing you know some bright politician says, "Okay, we'll reduce property taxes and substitute a local income tax," and the net result is that property taxes get reduced very little and you just have this extra income tax to pay!

Similar points apply, mutatis mutandis, to the notion of a national sales tax or to a raise in the state sales tax. Does anyone really believe this would be a _replacement_ rather than an _addition_? I certainly don't.

Heh. That's essentially the corrupt bargain that PA governor "Fast Eddie" Rendell wished to impose upon the state: minor property tax abatement, coupled with an increase in state income taxes, or sales taxes, or something. It seemed to change periodically. The great property tax controversy here pertains to the disparities in the funding of school districts, with many of the suburban districts, particularly along the Main Line, just beyond the Philadelphia city limits, among the wealthiest in the Northeast US, and the school district of the City of Philadelphia, well, a "chronic underperformer". Approximately a decade ago, Rendell, as mayor of Philadelphia, floated the proposal of incorporating, unilaterally, the suburbs all the way up past Montgomeryville (this is a distance of 15 miles or more from the city), all in an attempt to capture more lucre for that revenue-negative black hole in the SE corner of the state. Addressing the primary cause of educational failure in Philadelphia, the utter destruction of black family life, is verboten; addressing the secondary cause, that a substantial minority of these students lack the innate aptitude to master algebra, let alone calculus and the finer points of the English tongue, puts one beyond the pale of discourse. And so, proposals for just that sort of tax-shifting and addition are all that we discuss. And voucher proposals are about as popular as sackcloth and ashes; wealthy suburbanites have no desire to see fatherless urban youths transferring to their prizewinning suburban districts, brought by mothers desperate to walk them back from the precipice of criminality.

So, the problem is luminous in its clarity for me. So while, on the national level, I'd rather we had tariffs and some sort of border-adjusted VAT, if any of those things are ever enacted, they will be applied alongside the income tax, and then where will we be? At an effective 70% marginal rate?

Good post and good comments. Seems the running principle here is that, prudentially, taxes beyond a very small percentage may only really be justified on the local and state level. Every year the libertarians remind us, in a perfectly valid point, that the Income Tax was applied in their country only with the assurances that it would very, ever, not in a million years, exceed 10%.

The problem is that both parties have now plunged, headfirst, into the plutocratic business of tax loophole upon loophole, leaving a whole class of bureaucrat-industrialist-politicians to their own little world of financial mummery in which to enrich themselves.

Remember how old Hilaire Belloc made the startling remark once that America is essentially a monarchical form of government, with Washington as our Versailles? Seems only more accurate as the days go on.

I contend that whoever dreamed up the concept of property tax was probably criminally inclined or a natural born Democrat. A poor farmer who owns his farm can pay income tax if his crops come in and sells the produce but if they don't he can loose his farm because of property tax. Without a property tax he cant loose his farm. Hence the evil nature of the concept of property tax.

property taxes are bullshit. if you have already payed for it, you shouldnt have to pay agian

Property tax is rent, no other logic makes sense. If I don't pay it, the state takes it from me, and gives the property to someone else who will pay. The title means nothing, except that its a piece of paper that says you are the owner, nothing more. I have to pay for the privilege of owning the property, I have to get permission (permit to build or change something), and they can tell me what I can and can't do with my property. How is that any different than renting? Who is the real owner, me or the state?
It is time for this evil tax to end! Fund the schools, roads, hospitals, police,and fire with users fees. If you want to have kids and/or have a large family, that's fine, but do not expect other people to pay for their education. I don't have any kids, and is it right for me to pay for their education? As for the roads, charge a higher fuel, licensing, and toll tax to cover them.
If America is the land of the free, then why am I not free on my own land? I shouldn't have to pay for the biannual privilege of land ownership. End the tax now, fund the government by other means, and stop the enslavement of the people by the government. The land that I own should be my small piece of the world where I am free. I do not take advantage of stealing from other people who live adjacent to me.
End the Evil!

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