The Property Tax: As Good As Sliced Bread — And Maybe Even Better

Posted by Morbo

Let’s say you’re in the market for a new stereo. You could go out and buy the cheapest thing you can find. Chances are, however, you won’t enjoy your purchase. It probably won’t sound good and will break down within a year.

If you spend more money, you’ll get much better quality and will enjoy your stereo for many years to come.

Simple, right? Americans understand that principle when it comes to consumer goods. No matter if you are buying a car, a house or just a suit of clothes, generally speaking, the more you spend the better the product.

Why, then, do Americans persist in believing they can pay low or no taxes and still get top-quality services from the government?

David Brunori, a professor of public policy at George Washington University, in an interesting column in The Washington Post last week, did something that must have made the gang at the Heritage Foundation shudder: He praised property taxes.

The property tax, Brunori pointed out, is a great way to pay for important services like public schools, libraries, parks and so on. What’s better, it’s a progressive tax. The more expensive your house, the more you pay.

Unfortunately, the property tax drives knee-jerk anti-tax Republicans insane precisely because it forces rich folks living in 48-room mini-castles with nine-car garages to shell out more bucks. This gives birth to tax rebellions like California’s notorious Proposition 13.

Years later, we can look at the fruits of that idiotic move. California once had some of the best public schools in the nation. Now they are among the worst. You get what you pay for, folks.

As Brunori notes, rising property taxes sparked by escalating home values usually are a good sign for a community. In some parts of the country, homes have doubled in value within five years. What other investment can do that?

Desirable communities and neighborhoods are marked by certain features: good public schools, well-stocked libraries, safe parks and streets and efficient public services. After all, you don’t see people lining up to buy houses in run-down towns that can’t even get the trash picked up.

This is why, even if you don’t have children and never plan to, you should care about your local schools and understand the relationship between those institutions and the property tax. Basically, good public schools equal a happy, stable community. With good schools, you will watch your investment in a home grow and probably won’t ever face the prospect of not being able to sell if you have to.

Furthermore, an educated workforce and a community that takes education seriously attract business. They attract the arts. They attract stable families who put down roots and stay. That means clean streets and safe neighborhoods. When you join the reflexive anti-property tax brigades of the right, you put all that in jeopardy and shoot yourself in the foot in the process. You might as well take a sledgehammer and start smashing big holes into your home.

As Brunori puts it, “We all want well-staffed police and fire departments, well-paved roads, regular trash collection and, above all, good schools. The property tax is the one tax that provides a stable, continuous stream of revenue to localities to ensure that these services are adequately funded….I could move to a place with lower taxes, but I like what I’m getting for my money.”

Of course, increasing property taxes have their down side: They can escalate too quickly and put the squeeze on middle-income families or retired folks living on fixed incomes. Assessments can also be non-sensical. Thankfully, there are remedies for these problems. New property assessments can be phased in over time, thus making the increase easier to shoulder. Assessments that don’t seem to make sense can be appealed.

For the older folks, partial or whole property tax deferments can be offered. When those people are ready to move into assisted-living communities or smaller homes, their houses will sell at tremendous profits, and the outstanding property taxes can be taken from that.

It’s too much to expect Americans to be happy as they pay their taxes. Examples of pork-barrel spending and waste exist, and questionable decisions are often made at the federal and state level. Too often, government in Washington or the state capital seems remote. Not so with the property tax. Want to see its effects in action? You don’t have to go far. Walk out the front door and head down the block.

And if you still can’t stand the property tax, Brunori provides some options. There are plenty of low-tax, low-service states where the schools lurk the bottom of every list, the libraries don’t have electric typewriters let alone computers and the public services are indifferent at best.

Alabama, anyone?