Property Tax Caps and Local Governance

Property Tax Caps and Local Governance by Len Burman

My comments:

2% is awfully low when compared to the increase that Home Owners Associations usually get, which is inflation.

The problem with property taxes in general is WHAT they fund. Schools are a redistributional activity – and unless you have a Georgist level of land value taxation with a citizen dividend – the proper tax to fund it is an income tax or maybe a net business receipts tax (provided that the net includes taxing wages and employees can chose education providers).

The property tax should fun local infrastructure and public safety – basically what an HOA would provide. Indeed, if everyone had a strong HOA with privatized roads, fire protection and security, property taxes could be dispensed with altogether.

Of course, in modern smart growth communities, there would be a great deal of overlap between neighbors and co-workers. If the local employers were cooperatively owned, the overlap could increase further without the danger of old style company towns turning workers into slaves.

Of course, in a smart-growth, employee-owned world, the cooperative would provide all the services (see Mondragon in Spain) and there would be no need for taxation or a separate government.