The very worst entities for issuing money
are governments, because they produce
nothing, but only take from others.
From the Rust Belt to the Asteroid Belt: The Case Against Property Taxes
by Jeff Fullerton
Attribute to L. Neil Smith’s The Libertarian Enterprise
Recently—as of last November—Pennsylvania voters passed a referendum that many homeowners hope will eliminate school property taxes.
That just so happened to be the one that I sat out. Partly because I was too busy that morning living with one foot in two places and trying to get to work on time. Secondly because I rationalized that if we abolished property taxes we might end up with something worse. Such as a revenue shortfall that results in bringing back the property taxes and keeping the sales tax increase or whatever they tried replacing it with! You can never underestimate the capacity of government to try to have its cake and eat it too and it would be easy for them to justify the additional revenue stream in light of their ever increasing appetite for spending and debt.
But a few months later in the dead of winter while I was nursing the wounds inflicted by mean old nasty Mother Nature, I have been doing a little soul searching and research on a number of things. And I’ve begun to rethink my rationale for sitting out the referendum. It’s not to say that my views on taxes have evolved as I have long thought them to be evil for the same reason robbery and slavery are evil. Especially the property tax which school districts turn to for funding because it is a reliable source of revenue independent of the ups and downs of the economy which can dry up revenues derived from sales or income taxes. Which was the reason North Dakota voters rejected the proposal to replace property taxes with a tax on the profits from oil and gas drilling. They reasoned that something might happen to the industry—either the Obama administration might succeed in killing it or OPEC increases production which would lower prices and slow demand for new drilling. And they were right on the latter scenario.
History proves that taxes levied on real property and fixed structures like houses are the most reliable source of revenue. Yet that also is what makes them the most evil of taxes and the most regressive; contrary to the claims of Progressivists who always double down on what has been the staple of tyranny since the dawn of civilization. For everyone down through the ages it has always involved the plea of necessity. Even Benjamin Franklin counted it among the certainties of Life: Death and Taxes he said. Taxes after all are the price we pay for civilization.
And what a painful price it has been.
Aside from a few Libertarian fellow travelers I’ve always assumed myself to be mostly alone in the world in regard to this issue. And it was someone on the PA Libertarian email forum who long convinced me that tax reform is usually a Shell game in which the tax just gets shuffled around and shifted somewhere else but never goes away. Yet it cannot be repeated often enough that property taxes are are especially odious and inhumane and really ought to be the first tax to be abolished if your goal is a phased withdrawal of government from private life and the ultimate Libertarian goal of the abolition of all taxation in the fashion of slavery. Since taxation is in essence a subtle and in many cases not so subtle form of involuntary servitude and property taxes are the worst of all because anyone who owns a home or farm or business is forced to pay them least they forfeit the roof over their head or source of their livelihood. As opposed to income or sales tax—which you don’t have to pay if you decline to participate in the economy. The Affordable Care Act was similarly evil because it compelled participation. Likewise the property tax which turns the very house that shelters you and the land that sustains you into a yoke that enslaves you. Especially if you are poor or have strong ties to the place you live.
Best argument I’ve ever heard against property taxes comes from this video : https://m.youtube.com/watch?v=4O6_UOgvIoQ
One of the points these ladies made that really caught my ear was the part about pushing people out of their homes to pay for other people’s education. They do a great job deconstructing the notion of justice in a system where affluent upper middle class households impose the financial burden of educating their children on their less affluent neighbors.
That’s what makes it especially evil. The way I have long seen the system in action; local and municipal governments are essentially robbing property owners to pay for the cost of educating the workforce that employers ought to be paying for or just providing OJT through apprenticeships. That’s not unlike robbing the public purse to build stadiums for wealthy sports teams that could afford to build their own.
The worst thing about property taxes aside from their immoral nature is how the drain they impose on people who could otherwise be self sufficient and better able to ride out hard times or personal crises without loosing their homes and be farther ahead and better able to rise again. I guess it’s better to push people out onto the streets and then into public housing so we can provide job security for those who make their living managing the lives of others.
There is another author who makes the case for property ownership that is free of rents paid to states or municipalities.
He starts off mentioning a trip he made to Ireland where one of the local people asks him; how can Americans think they own their property if they have to pay taxes on it? Apparently up until recently the Irish have traditionally enjoyed a measure of economic security that we can only dream of—though the days of freedom from that burden may be numbered because Irish politicians have been proposing a property tax—no doubt as a source of revenue to make up for some of the financial disasters that hit Europe earlier in this decade. The Plea of Necessity rears it’s ugly head again.
To the people of Ireland I’m tempted to shout: NOOOOOOOOOOO! Don’t do it! But it’s probably too late. I’m sure the upscale professional class that makes a living as civil servants or in businesses that do government contract work (their equivalent of Limousine Liberals and Land Rover Republicans) are of course going to be all for it.
As for the rest of this video: the moral premise is excellent: a person has a right to own their land and the home upon it. However the narrator voices the notion that limits must be set to prevent the rich from buying up all the land. That kind of sounds a bit Marxist and is fundamentally flawed on grounds that property taxes are the very mechanism by which the rich accumulate surplus property by way of forfeitures and Sheriffs sales. Also the accumulation of surplus land is kind of self-limiting in a free society with authentic property rights because there is only so much land an individual can occupy and defend with a physical presence and if there are no sheriff sales and no eminent domain abuse no one can be dispossessed or forced to sell their property against their own will.
Property taxes are cruel and regressive baggage inherited from the old English system that should never have been allowed to continue after the colonies won the Revolutionary War. They were retained because it was a convenient way for local governments and the states to raise money to finance their operations and pay off debts. And in those days the hardships imposed on the people—especially the farmers who had no way to raise the cash to pay them in order to keep their land and their homes: this was a prime cause of the economic pain and social chaos that led to the crisis and the abandonment of the Articles of Confederation in favor of our current Constitution. This resolved the crisis and started the country moving forward again but it also set the groundwork for further erosion of property rights and personal liberties by an increasingly intrusive federal government and failed to resolve the issue of local governments bleeding the land owners. Indeed the feds encouraged the states and cities toward ever more ravenous appetites by pushing a uniform model that evolved into our modern public education system.
Which becomes ever more expensive to operate and at the same time less and less relevant to a world gone digital. Yet we are expected to continue paying to run the old brick and mortar schools and the fleets of yellow buses and keep raising property taxes to keep pace with inflation and whenever the teachers want a raise —and there are some districts where negligent politicians underfunded the teacher’s pension plans —or misappropriated the funds for other things. And the property owners are expected to pay—and if they can’t—the school district seizes their property and sells the right to take over the responsibility of paying the tax to whoever is willing and able.
This is hardly justice and it’s only going to get worse if it is allowed to continue.
Considering the technological revolution that is on the horizon I believe the abolition of property tax is going to be a major part of the solution to the future issues of declining wages and displacement of people by automation. In such a world property taxes give leverage to the local governments to pull the rug out from under someone who is foundering as a result of job loss , illness or other personal crisis. The property forfeitures and resale to opportunistic buyers higher up in the economic food chain lead to the very capital accumulation that the Left endlessly complains about but never seems willing to do anything about whenever they are in power.
I base my argument for abolition on two things. One is the morality of private property rights and the individual right to the pursuit of happiness enshrined in the Declaration of Independence. The other one to counter the claims by those on the Left who argue that resources and living space must be shared is a matter of logistics. It has been argued by those seeking to debunk Malthusian limits to population growth; that it would be possible to accommodate the existing population of the time (4.5 billion when the argument was made) in an area the size of Texas. Today you might have a little spillover into adjoining states but not that much. The effort is doable but would require some technology and a helluva lot of social discipline and central planning that I’m kind of surprised the Progressivists are not pushing it more aggressively because it would be their wet dream to put the climate change scam to shame! And I will pass on that future which was more or less just a hypothetical scenario to highlight the fact that there is no shortage of living space on the planet for everyone to have their own.
What does this have to do with property taxes? I go back to the issue of the morality of private property rights and basic human right to the pursuit of happiness mentioned above: that was enshrined in the Declaration of Independence. To survive and be happy—human beings require a place to stand and shelter from the elements. I recall that the chief editor of this journal argued that it is immoral and ought to be unconstitutional to tax anything essential to life. He was talking in particular about guns and ammo for personal defense and therefore life essential. The same would naturally apply to food and fuel for transportation and heating and of course shelter from the elements and the right to build and maintain it. Plus the land it sits on which is also useful to produce food using low tech subsistence methods in the event of a societal collapse or personal misfortune like job loss.
Which brings us to the issue of automation which lean—looked prophets have been harping about lately. They say that the ongoing revolution in robotics—A/I, delivery drones and self driving vehicles is on par with the transition from the horse and buggy era and is going to displace a huge number of people. Possibly everyone. We have been down this road before in history and in the long term there were always new jobs to replace the old ones. But pain none the less. My argument here is that getting displaced by a machine or other structural changes in the economy is but one more natural hazard that people have a right to shelter themselves against. Being able to remain in their homes and create their own economies by way of peaceful transactions with others when they are priced out of the wage labor market is a fundamental right. Abolishing tax on real property would make things easier on those who otherwise end up getting left behind in such a transition and it’s also the right thing to do.
It also corrects an injustice that ought to be corrected anyway regardless of circumstances. Like that point the Irishman made to his American guest; how can you own your own home and the land it sits on if you have to pay rent to someone else; be it a private landlord or the local school district?
And if you cannot actually own your property; how can you truly be free?
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