I'm pleased to share (with permission of the author) something that appeared on a mailing list I subscribe to. The conversation was along the lines of "how do we share the idea of land value taxation [a reform of the property tax] with people who are used to hating the property tax?"
Roy Langston wrote,
When I encounter the usual unreasoning hatred of property taxes, I just point out a few inconvenient truths, along these lines:
"All your life, you have been told that you have to hate the property tax. You have been told that when you earn income by your own productive effort, contributing to the wealth of society, that is an activity that should be punished by taxation; but when wealthy property owners get the benefit of government spending YOUR tax dollars on services and infrastructure that create higher rents and higher land values, you have been told they should never be asked to repay, in the form of property taxes, any of the welfare subsidy giveaway the community gives them.
"The people who order you to hate property taxes (most of them paid propagandists for wealthy property owning interests) never mention the fact that the property tax is in fact two opposite taxes. It is a tax on the value of improvements, which is the measure of what their owner contributes to the wealth of the community; and it is also a tax on land value, which is the measure of what the community contributes to the wealth of the landowner. They don't want you to know that fact because if you knew it, you might start thinking about what it means, and why they are trying so hard to make you hate the property tax. Can you figure it out? Or are you happy just being told you have to think whatever they want you to think?
"The people who order you to hate the property tax also never tell you another inconvenient fact: the USA is effectively a scientific experiment in the economic and social effects of property taxes, which range from a high of 4% in New Hampshire to a low of 0.4% in Alabama. They don't want you to know that the states that have the highest property tax rates, like New Hampshire, New Jersey, Texas, Wisconsin, Connecticut and Oregon, also tend to have the best economies, the highest personal incomes, the lowest unemployment and welfare rates, the best public schools, roads and other public services, the least crime, the lowest total tax burdens, the least government corruption, the most affordable housing, and the fewest homeless. By contrast, the states with the lowest property tax rates, like Alabama, Arkansas, California, Massachusetts, Mississippi and Washington DC, tend to have the worst economies, the lowest personal incomes, the highest unemployment and welfare rates, the most expensive and corrupt governments, the least affordable housing, the most homeless, the highest crime rates, and the worst schools, roads and other public services.
"Likewise, around the world, the countries where governments get the most revenue from property taxes, including the USA, Britain, Japan, Canada, Australia and Switzerland, tend to be the best countries to live in, have the highest personal incomes, the best economies, the lowest unemployment and welfare rates, the best public services, the least government corruption, and so on compared to the countries where governments get little or no revenue from property taxes, like the Philippines, Bangladesh, Mexico, Zimbabwe and Pakistan.
"In fact, if you divided the USA into three countries for statistical purposes -- the 17 highest-property-tax states, the 17 lowest-property-tax states (including Washington DC), and the 17 states in the middle -- the first would be near the top among the most advanced countries in the world in economic health and overall quality of life, the second would be near the bottom of the list of industrialized countries, and the third would be near the middle of the list.
"Why don't the people who try to make you hate the property tax ever want you to know these facts?"
I would add to Roy's analysis the comment that the states -- and within them, the counties -- that have the highest property taxes are also the places with the most educated electorate and which send the most children to college. And that the converse is also true.
With this in mind, does it make sense to cap the property
tax? Does it make sense to substitute sales taxes and wage taxes for
the property tax? I don't think so. I do think it makes sense to reform the
property tax -- to reduce or, better, eliminate the portion of the
property tax that falls on buildings and other manmade improvements,
and simply rely on taxing the value of the land itself.