Issue 663 Property Taxes August 25, 2015

Property taxes are one of the fairest taxes in existence if they are done properly.  Here is how.

A good property tax:  Property taxes are based on the idea that the amount of property you own equals how wealthy you are (or if you go the historical route, you are renting the land from God [according to Thomas Paine]). Property taxes today are generally done based on value of a home, or based on the livable square footage in a home.  These forms though cause problems as they are not stable or fair.  They are not stable for if the values of the homes in an area shoots up, then people will have to pay massive amounts of taxes which they may not be able to afford.  Likewise, if values plummet, then the government loses needed revenue which are used to maintain services.  If you increase the living area in your home with an addition, then you also may be paying more whether you are taxed on your home's value or the square footage of living space.  Also, lest we forget, assessors must be sent out by the government to value the homes and check living space to accurately gauge how much to tax us all, which is expensive (an expense we have to pay for with our taxes). As such, this form of property tax is punitive in this sense. So what is the third option here?

The third option is not based on value or living space.  It is based on the square footage of land upon which the home sits on.  In short, it is not your home being taxed, but the land it sits on.  In this instance, you are on 1,000 square feet of land, and each square foot is taxed at a $1 a square foot.  Therefor you will only pay $1,000 a year in property taxes.   The only way that would change from year to year is if the government raises taxes per square foot.  As such, say they raise it to $2 a square foot on your 1,000 square foot piece of land. You will then pay $2000.  Mean time you can build up as much as you want with respect to your home without fear of raising your taxes or the government losing money either due to economic downturns and values falling.   In short, you may do whatever you want to your home and have a plannable expense in the form of your taxes.

Conclusion:  The property tax I described here is stable, and does not require additional costs to reinforce.  Additionally, it is a plannable expense.  So you know per year how much money to set aside to pay your property taxes.  It is a simplified system that accommodates everyone.  I do not believe that the Federal Government should have access to this revenue though.  In this instance it will be reserved to the Local governments who would then give a small percentage of their revenue based on the population size of their area to the State government.   So what do you think?  Want a fairer property tax?