Both owners and renters of real estate directly or indirectly pay property taxes to support government. If the tax isn’t paid, the government takes the property. Thus the reality of American ‘private property’ is that yours is rented from the government. Now days, you can’t garden in your front yard, raise chickens, store old cars, put up signs and a long list of other things a true owner used to take for granted; your government, the de facto owner, will fine you. All this exists with Constitutionally protected property rights.
Imagine what less protected property ‘ownership’ would be like: You probably couldn’t build your choice of a house, use your choice of energy and water or protect the place with your choice of walls or fences, right? And your government could take your place at will to hand it to a crony developer while ‘compensating’ you with a fraction of its value. But that can’t occur under the 5th Amendment to our Constitution, right?
We were mulling our rare and wonderful American rights to private property recently when a report reflecting the subject in New York City popped up. A couple of interesting bits included the disconcerting fact that some 25% of NYC property is tax exempt. Elsewhere, that number can vary from 10% up to 60%. But learning that fully a quarter of a really large city’s property was untaxed demanded some thought; that’s got to be big bucks.
Why should we care? Well, the city and county governments have to be funded, don’t they? And I don’t know about yours, but mine ain’t cheap. And a lot of that is paid from property taxes. So all the property untaxed is being subsidized by the suckers whose property is taxed, isn’t that so? And I’ll bet you’re like me, one of the taxed suckers. If you’re a New Yorker, you might be paying up to 25% more property tax per this report.
Actually, not quite 25% because the city’s own property should be untaxed; it makes no semse for the city to tax itself. But that’s nowhere near a quarter of the total property in the city, is it? Hardly. But as a generally Christian nation, we’ve traditionally exempted churches and religious property generally. Then we exempted things like hospitals that were needed; that led to subsidies for industrial development, followed by ‘help’ for friends of politicians who offered to redevelop slums and you can fill in from there.
The bottom line is, every time more property is exempted, the remaining property owners have to pay more to take up the newly created slack. Politicians milk this process since it’s nearly invisible and is seldom reported. Taxpayers just see higher tax bills every year without understanding all the reasons for it. New York City seems to have, considering the magnitude of its real estate, some rather expensive local politicians.
This rumination led us to two simple questions. First, what private property should be tax exempt today? Maybe that needs some up to date thought. And second, how much untaxed ‘private’ property are you subsidizing? Perhaps you want to consider that, too.