You Cannot Own What the Government Can Take for Not Paying Rent
by:
KrisAnne Hall, JD
There is a faulty premise at the center of the debate over eliminating homestead property taxes:
“If we eliminate property taxes on people’s homes, local governments will go bankrupt.”
Before accepting the conclusion, perhaps we should examine the premise.
First, homestead property taxes are only one portion of the property-tax base. Eliminating taxes on owner-occupied homes does not eliminate commercial property taxes, taxes on investment property, or every other source of local revenue. Nor does eliminating homestead property taxes mean eliminating local taxation altogether. But there is a much more important point being missed.
Government revenue is not the only measure of a prosperous community.
For generations Americans have lived under a system in which we call ourselves homeowners while knowing that no matter how many years we work, no matter how faithfully we pay the mortgage, and even after the bank’s lien is finally gone, government can still take the home if we fail to make the government’s annual payment. That is not full ownership.
James Madison understood property very differently. In his 1792 essay Property, Madison defined property as the “dominion which one man claims and exercises over the external things of the world, in exclusion of every other individual.” He then identified the very purpose of government:
“Government is instituted to protect property of every sort.” James Madison
And Madison supplied the standard by which government should be measured: a just government “impartially secures to every man, whatever is his own.” Notice the principle: Government exists to secure your dominion over what is yours, not to maintain a perpetual financial claim upon it. That distinction was not academic to America’s Founders. It was at the heart of the controversy that produced the American Revolution.
Samuel Adams warned in 1768:
“For if our Trade may be taxed, why not our Lands?” Samuel Adams
He continued the progression: why not the produce of our lands and ultimately “everything we possess or make use of?” His conclusion was not merely that such taxation was expensive. It was that taxation imposed without legitimate political authority reduced free people to the condition of “tributary Slaves.” That is the Liberty First principle we have forgotten:
Property is not merely an economic asset. Property is an element of liberty itself.
This is why the familiar objection, “If you eliminate homestead property taxes, they’ll just raise some other tax” also misses the point.
Perhaps another tax will rise. That is a separate political battle, and citizens should demand that government justify every dollar it takes and every dollar it spends. But not all taxes burden liberty in the same way. A sales tax may increase the price of something I choose to purchase. A transaction tax may attach to something I choose to do. But a recurring tax on my home places the continued possession of something I already own upon my ability to make another payment to government. Fail to pay a sales tax and government does not take your house. Fail to pay the property tax, and ultimately it can. That difference matters.
The economic discussion also routinely ignores the enormous social value created when people actually own their homes. Imagine communities filled with families whose homes, once paid for, actually belong to them. Retirees would not face an ever-increasing government bill merely for remaining in the houses they spent their lives acquiring. Families would possess an asset capable of creating genuine generational wealth. Economic downturns would not automatically threaten the roof over a family’s head because government still demands its annual tribute. Homeowners would have greater security, greater equity, and greater incentive to improve and preserve the communities in which they have a permanent stake.
We have lived without that kind of ownership for so long that we have forgotten what it means. The question, therefore, should not be framed merely as:
How will local government replace the revenue?
The more fundamental question is:
What would happen to our communities if millions of Americans were finally permitted to own their homes completely?
For generations we have calculated the revenue government receives from taxing the family home while rarely calculating the wealth, security, independence, and liberty the people lose because of it.
Madison told us what property meant: dominion. Samuel Adams warned us where the contrary principle leads: if government may continually tax our trade, our land, its produce, and ultimately everything we possess, what exactly remains beyond government’s claim? A free society should be looking for ways to restore property to the people, not inventing reasons government cannot survive without a perpetual claim upon their homes.
The purpose of government is to secure property. It should not require us to perpetually purchase from government the privilege of keeping what is already ours.
