Property Taxes Are Good, Actually.

They are the price you pay for privatizing a resource you did not create.

Photo by Luca J on Unsplash

Less than fifty-seven hours after being made public, a Colorado bill to significantly cut property taxes passed The Centennial State’s legislature. Reducing property taxes by over $1.3 billion, bill SB24-233 is just the first in a series of potential property tax cuts that could leave a $3 billion hole in Colorado’s local and state governments.¹ This November, voters will weigh in on two ballot referendums supported by dark-money Republican groups that could lower the residential and commercial taxation rates.²

Given the COVID-driven population boom, rising housing prices have been a focal point of Colorado politics over the last few years. (As a Denver transplant, I take full responsibility.) As home prices rose, property taxes increased with them. Some homeowners have seen their taxes rise as much as 40%, forcing once-stable middle-income households to scramble for cash.³

Colorado Governor Jared Polis at a press conference for SB24-233.

Displacing long-time residents is undoubtedly a problem needing a solution, but as Colorado’s population boom is already slowing, a short-term fix, such as capping annual tax increases on households under an income threshold, would be sufficient. After all, Colorado already has the third-lowest effective property tax rate in the country, according to the conservative Tax Foundation.⁴ However, lawmakers bypassed a targeted recourse in favor of a blanket measure drawn from the conservative worldview that property taxes are a tyrannical burden.

“Tell you what. Property taxes - paying for what you already own? Now that’s a scam.” — Dee Reynolds, It’s Always Sunny in Philadelphia

Misinformed or unaware of the purpose of such taxation, they chose to reduce all property taxes, lumping large corporations and small homeowners into the same bucket. In such circumstances, the public and politicians would be well-served to remember why we tax property in the first place: property taxes are not a form of government overreach but rather the process by which the general public recoups the value of the land they are excluded from using.

Land owned by Microsoft founder Bill Gates, the largest private land owner in the country. (Source)

Land is a Communal Resource

Land is the source of all value, not only in the raw materials we extract from it but also in the products that are down-the-line products of nature. Everything, from the gas in your car to the computer you’re reading this article on, is derived from land. And yet, no person created the land. It’s a natural gift. So, how did individuals come to own it?

In a capitalist system, land is owned by the deed holder. They purchased it from the previous owner, and so on and so forth, tracing back until American soil was first conquered and partitioned in the 18th and 19th centuries. As the owner, the deed holder is the sole determinant of what happens on that land. They decide who is allowed on it and for what purposes it can be used. They also reap the financial benefit of any economic activity on the land, whether that’s drilling for oil or building a home that will increase the land’s value.

As the land’s master, the deed holder is excluding greater society from using what is a natural product. The owner didn’t create the land, they didn’t purchase it from the Indigenous inhabitants, and they might not even work it or live on it. They merely posses a document that makes the land their property under our artificial legal system.

So, given the capitalist system makes land — the source of all economic development, societal progress, and life itself — the private property of a sole owner, society needs a way to recoup a portion of that natural value.

In 1803, the U.S. Government bought the Louisiana Territory from France and distributed the land to private owners.

Property Taxes Are Good, Actually

As a property owner is preventing land they did not create from being used by everyone else, property taxes are how society recoups a portion of that land’s value. Land ownership is the privatization of a natural resource, no different than owning a rushing river or the apples growing from a tree. Taxation is the price land owners must pay for privatizing that crucial natural resource. Hypothetically, if someone bought the rights to America’s air, the rest of us would need a way to access some of it to breathe. The government could either take a portion of the air and distribute it to the rest of us, or it could tax the air’s value, which it would use to purchase air so non-air owners could survive.

While conservatives have convinced many Americans that taxation is a government transgression upon their rights and property, the truth is contrary. It is not taxation, but the private ownership of land, the resource that seeds humanity, that is the contradiction. Partitioning our soil into individualistic plots is no different than giving a select few fish dominion over the oceans and forcing every other sea-creature into serfdom to survive.

Signs at an anti-property tax rally in Pennsylvania.

We see this rightist worldview materialize with the passage of the Colorado bill. While there’s no doubt middle or low-income homeowners need relief from a sudden tax spike, that is not the lawmakers’ motivation for cutting already-low property taxes. (If it were, they would have passed a temporary cap based on household income.) Instead, Colorado’s lawmakers and many in the public who supported the bill are operating under the false belief that land is an individual’s right instead of a communal resource. Through this lens, one incorrectly sees property taxes, or any other tax for that matter, as a government intrusion upon an individual’s privacy and livelihood.

While I recognize the necessity of certain forms of land ownership (families owning their homes instead of paying rent in perpetuity is good) the cardinal dynamic of private property remains: individual dominion over land excludes others from accessing its natural gifts. This is true whether the land in question is big or small, commercial or residential. Therefore, it is more than just for those prevented from accessing the world’s resources to recoup a portion of their value through taxation.

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1. https://coloradonewsline.com/2024/05/08/bipartisan-property-tax-reform-passed-colorado/

2. https://coloradonewsline.com/2024/02/13/conservative-groups-property-tax-cut-colorado/

3. https://www.nytimes.com/2024/04/03/us/property-taxes-colorado-mountain-west.html

4. https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2023/