Timothy Bates wrote:
> Raymond G. Van De Walker argued
> > I favor a single tax on real-estate, because protecting real-estate is
> > the only value that I'm certain that only government could create. Also,
> > this tax therefore cannot punish consumption by poor people, and only
> > punishes relatively well-off land-owners. At the same time, it punishes
> > inefficient use of land.
> that, I think, is the first coherent, logical, justification for tax that I
> have ever heard: restrict it to taxes on the values created by government.
> Excellent reasoning.
I live in a state that has no income or sales tax. Most of the state and local revenue is from property taxes, so I think I can contribute on both sides of this issue.
The claim that governments create property value is mostly false. The only value they give to the land is the rate of scarcity they give to as they make the original land grants, and the amount of market value they depress the real value below due to excessive taxation (i.e. if the tax is high, the ability to derive positive cash flow from the land is reduced, so its market value is low), as well as services which the government provides to landowners. Landowners add value to the land by building and developing the land with their own capital. The idea that you should be taxed repeatedly, every year, on property which you have afixed capital into is a confiscatory one, unless the land owner is receiving something for those property taxes.
Currently paid for by property taxes:
Education (K-12 and some college support) police departments
maintenance of community property (mostly recreational or green belt) some road maintenance
The largest use of these taxes is education. Should people who are sterile or lifelong bacholors/bachelorettes be forced to pay for the education of the fertile members of the community? That is definitely confiscatory. I do know that senior citizens can live in developments which are specifically exempted from the education portion of the property taxes for this reason. Shouldn't people who send their children to private schools be exampted from these education taxes when they never use those services? Thats definitely confiscatory.
Police departments: That and fire departments are iffy. The idea that you should pay higher insurance if you don't have such 'protection' is dubious, since the risk of such in areas where there is no protection tends to be lesser than in more developed communities...Also the idea that you should submit to one monopoly service is also iffy.
Zoning departments do protect existing land owners from the stupid actions of their neighbors, so in that sense 'establish' property value by protecting the devaluation of a property from the bad things a neighbor might develop on their land by preventing them in the first place. However they are also frequenly used to prevent the increase in value of a property by its development for more lucrative use.
Additionally, on the claim that property taxes do not punish poor people, that is definitely false. A wealthier person uses a far smaller percentage of their income or assets in their housing than poor people, who frequently pay more than %40 of their annual income and 100% of their savings on providing shelter for their families. In this way, property tax is definitely a regressive tax. Moreover, communities which are predominantly made up of poor people and k-mart type businesses have far lower dollar value per acre than a community of yuppies, high rent and haut couture shopping, professional service corporations, and well endowed private institutions. Because of this disparity, a person in a poor communty is likely to pay two to four times as much per $1000.00 value of property than a wealthy person in a property wealthy community. In this way it is also regressive, unless the state imposes the same dollar tax per thousand dollar value on every property owner.
The problem with evenly apportioned taxes like this is that it is anti-environmental and anti-rural, unless specific exemptions are written in for farmland and wilderness property. A farmer will find it more profitable to subdivide his land and sell it off to developers and homebuilders of all kinds, so he can retire to Florida, rather than maintaining the rural character of the community, while wilderness owners will build vacation rentals and displace habitat for wild species.
Now, should property taxes be applied at the federal level? What value does the federal government give to my property other than depressing it with their inflationary fiat money policies? Welfare and other entitlements add nothing to my property, and environmental laws prevent me from draining and developing 'wetlands' that were not wetlands ten or twenty years ago, since the definitions seem to change toward more restrictive ones every so often. National defense? Maybe, but what exemption should I get for the fact that I am a veteran and have contributed years of my life to that defense at below minimum wages?
I think its clear than no matter what type of tax you use to confiscate people's money for a monopoly government, it is never simple.