Saturday, November 13, 2004

Flat Property Tax

Atrios at Eschaton has put forth a request for useful bad policy ideas to help illuminate the differences between Republicans and Democrats. My suggestion for this is a flat property tax.

The bad tax proposals so far are a flat income tax or a national sales tax. These are terribly regressive and, in my opinion, make no sense in terms of political philosophy. What of government functions or operations suggests that taxes should be based on income or spending? Instead I suggest that the one function of government that even conservatives can agree is legitimate is defense of property. As such then for each dollar of property one should pay a fraction of its value to cover these costs, hence a flat property tax. One advantage is that the taxes you pay don’t go up just because you get a raise. Only if you purchase something that requires federal government support do you pay additional taxes. This tax, unlike the sales and flat income, would be fairly progressive, although it’s not clear to me know if it would be more or less progressive than our current system.

I am working on examining some federal statistics to try and figure out how such a tax would have to be structured. If anyone knows anything about this, has seen any work on the subject, I’d be very interested. I’d also be interested to know if there is no work on this idea, why that is so. Why should there be people working on things as silly as a national sales tax and no one working on something like a flat property tax?

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At 9:44 PM, Blogger Isabelle said...

I live in Florida, one of the few states that has no state income tax, and our sales tax is still around the norm of 6%. In addition, groceries are not taxed. While there are some states that say that Florida's no state income tax is regressive, for me personally...I don't agree. I have more take home pay now that I did living elsewhere, and my property taxes are also within reason...actually less than some of my relatives. While it works for me at the state level, I'm still not quite sure if it would work at the national level considering some things I have read, but as all things in life, I think it is worth looking into. You should never turn down a possible opportunity in life until you factor in all the pros/cons.

As for the flat property tax, you'd have to be careful don't want to create a situation that would force lower income families to rent rather than buy a home.

At 1:09 PM, Blogger MSR said...


Thanks for the input. I'm really not proposing this as an actualy policy change. I expect that it is a bad idea. However, I think it is good to think about such things and I find it striking that something like this is so little considered, when the other plans are being proposed. I'll post on the sales tax sometime and take into account your coments. Thanks.


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