Taxing Tax Reform

A progressive makes the case for property taxes

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Image by Flickr user: Enter the STory / Creative Commons

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Restore the property tax! Restore the property tax!

It’s not a chant you’ll hear anytime soon at a Tea Party rally or even a liberal political potluck, but the progressive social-justice magazine Dollars & Sense(March-April 2011) makes the case that the property tax, “the original wealth tax,” is perhaps the fairest tax—and that, properly levied, it could prevent massive cuts in public services.

“It’s the oldest wealth tax of all, the tax that financed Chinese civilization over 2,000 years ago, the tax that until World War II financed most of the government in the United States,” writes Polly Cleveland, an adjunct professor of economics at Columbia University’s School of International and Public Affairs.

Since then, states have shifted to income and sales taxes, and most property taxes now go toward local government, especially school districts. This creates a stark and often criticized class disparity, Cleveland explains: “Within the same state, rich districts can finance good schools at low property tax rates, while poor districts can only finance lousy schools at high rates. But this is not the fault of the property tax; it would be equally true of any local tax.”

Cleveland suggests shifting school financing in part to the state and federal level and reclaiming the property tax as a progressive tax tool, arguing that, because property ownership is concentrated among the wealthy, property taxes are actually even more progressive than income taxes.

Of course, Cleveland knows that she has some lobbying work to do, given that most people have come “to perceive [property taxes] as obsolete, unfair, and a burden on the poor and middle class.” This, she claims, constitutes a PR victory for the rich people and corporations who reap most of the benefits of our anti–property tax fervor.

cover-166-thumbnailHave something to say? Send a letter to editor@utne.com. This article first appeared in the July-August 2011 issue of Utne Reader