Since the dawn of human civilization, governments have relied on property taxes to pay for public services. 

In ancient Egypt, the pharaoh’s tax collectors levied taxes on individuals’ grain, oil, livestock, and land. When Alexander the Great conquered the world more than 2,300 years ago, he established administrators to assess local property taxes in the communities he ruled over, with some of the more troublesome nations paying more as a penalty for their disobedience. European monarchs would later assess their own property taxes, which, on occasion, led to full-scale wars between wealthy land-owning rivals. The British property tax system would eventually develop into something comparable to what we see in America today, and the Founding Fathers of this nation accepted the existence of property taxes as normative and necessary for the development of a proper society.

Government taxes are not inherently immoral. In fact, taxes are a necessary part of a functioning community. Without taxes, there would be no way to fund police or fire departments, the military, or necessary government agencies.

However, property taxes are fundamentally different than other forms of taxation. Use taxes, such as tolls, require only those people actually using a service to pay taxes. Income taxes and sales taxes apply levies on the transfer of wealth. Some taxes, such as Social Security taxes, are applied in exchange for a future benefit (assuming Social Security survives, of course).

Property taxes, conversely, are applied simply because a person owns something. Under virtually all modern property tax schemes, it doesn’t matter how long you own property, how much you paid when you purchased the property, or the fact that you already paid taxes (in the form of sales taxes and other levies) when you first acquired the property. The government taxes you simply because you have something that is perceived to be valuable.

This form of taxation is immoral—arguably evil—and should be permanently eliminated. Historically, most societies have viewed property very differently from Americans today, often viewing it as something that belonged both to the individual and to the state. You might be thought to “own” your little plot of land in the countryside, but the whole of the region would be considered to belong to one ruler or another. In one sense, land never really belonged to individuals. Should a king, for instance, want to take the land for his own purposes, he’d often be justified in doing so. It is, after all, his country.

In Colonial America, little had changed compared to the systems used throughout Europe; local governments assessed taxes on property, in some cases applying higher rates for more valuable property. But Americans differed in that they believed, in line with thinkers like John Locke, that individuals should have inalienable rights, especially when it comes to property. They took the English idea “a man’s home is his castle” more literally than most societies ever had, and following the American Revolution, established legal safeguards ensuring that government couldn’t seize, control, or manage private property, with the only exceptions being if the property is somehow harming the property of others or if it is absolutely essential the government take the property for the good of the public, in which case the government would have to provide fair compensation to the owner. The property tax system, however, remained intact, largely because of its widespread use. 

What claim over property, however, does an individual truly have if he or she must pay the government for the right to keep the property? Although no private property belongs to the government, the government does, through property taxes, have such substantial power over property to effectively render ownership rights as nothing more than a mere privilege.

Not only do property taxes fundamentally limit owners’ rights, they are often unfairly applied and unjust, because many property owners will end up paying as much or more in taxes than they do for the property itself. 

For instance, in Illinois, the average annual taxes paid on a home priced at the state median value is about $4,000. Even if home values stay the same over the next half-century—and they almost certainly won’t—a family in Illinois will end up paying $197,000 over 50 years for a house that cost only $175,000 to purchase.

In areas in which property values have skyrocketed over the past 50 years, some elderly people are effectively being forced out of their homes because they cannot afford to pay property taxes on a modest house that might now be worth $1 million because of its advantageous location.

This is not to say property tax revenues aren’t necessary. Local governments rely on the revenues to pay for schools, roads, and other basic services. But instead of charging taxes based on property values, localities should charge fees to residents for those specific services. If everyone were to pay “police department” or “public education” fees, the public would have a better understanding of what government services cost, and it would be easier to hold government accountable for irresponsible spending practices.

Justin Haskins (jhaskins@heartland.org) is executive editor of The Heartland Institute.