Friday, February 04, 2005

Let's end property taxes

We all know that individual property rights are a (if not the) primary foundation for free societies, based on individual liberties. What good is it to claim ownership of a property (real or personal), invest in that property, and maintain that property if some entity can swoop in and take that property away from you.

It is the nature of government to expand at the expense of liberty (to paraphrase Jefferson). This is true even in democracies, perhaps especially so. There are many new examples both good and ill of how the government encroaches on our liberties. One such good example would be the Civil Rights act of 1964, which told private employers that they could not discriminate against certain classes of citizens (although, in the inverse, this could be seen as an expansion of the liberties of these "protected classes"). However, there are countless examples of government incursions that are self-serving, or which serve only to better the interests of the few at the cost of liberty for the many. The most galling of these incursions to me, today, is the widespread use of eminent domain laws.

The recent use of these laws goes well beyond the pale of what eminent domain should attempt to accomplish. This is a frequent topic on Neal Boortz's website, Nealz Nuze. Lately, it seems, state and local governments have taken to attempting to use eminent domain laws to steal land from individuals (who often do not have the power to combat such land grabs) and provide it to private developers. The rationale is that such grabs benefit society because the private developer's particular use of the property generates more tax revenue for governments than does the individual's use. This a clearly illiberal use of authority (and I'm talking classical liberal here, not our current definition, which means just about the opposite).

Such abuses got me to thinking. Why does the government get to tax property at all. There are countless other ways for governments to levy taxes. When a person knows that they must pay taxes on their land or have the authorities take that property away (at gunpoint - again see the link above for almost daily discussions of this point), doesn't the person's "ownership" effectively amount to a lease of property from the government? My view is that if we are going to say that we respect property rights, we might as well go all the way. Let individuals be confident in the fact that real property that they purchase is not going to be taxed away because the government, through its tax assessors, determines an arbitrary value of that land.

By eliminating property taxes, we ensure that individuals will not be interfered with in their use of land they bargained for and purchased. One argument against this view is that it prohibits the widespread growth of dynastic wealth - that is wealth that is passed from generation to generation, meaning that the wealth is effectively removed from the market for eternity or thereabouts. However, we already have the death tax (estate tax) wherein the government gets approximately 60% of the value of the property upon the owner's death (there are exemptions which currently exclude estates worth less than approximately 1 million). Moreover, for dynastic wealth to truly become a problem, the Parent owner would generally have to pass the property on to only one of his or her progeny. Otherwise, the wealth has a naturally diminshing value in that it is spread out among the children of the parent owner.

The only property taxes that should be levied should be on corporations, because a corporation is really treated as an individual who does not, generally, die. For example, IBM isn't going anywhere, so it could, without such a tax, acquire property in perpetuity and never have to pay a tax.

How awful would it be if the owner of a $200,000.00 home were left alone by the government instead of having to make yearly payments of thousands of dollars. Wouldn't most people save this money and redistribute it in other parts of our free market? Wouldn't property ownership then become an even greater creator of wealth and not just another means to rework an individual's tax burden? Why is it that the government has been allowed, through this tax to effectively claim ownership of the entirety of our country while in the procees relegating property "owners" to mere lessors?

I propose a constitutional amendment that offers protections for property owners from government incursions. Recall, it is the natural course for governments to expand their powers at the expense of liberties. Isn't it time for us to fight back on behalf of our liberties.

Note, I didn't even sink low enough to criticize governments horrific management of property rights, which can often lead cities to tax most of their citizens into other areas. That's a whole other discussion.

Kid Handsome


Post a Comment

<< Home