Florida has no income or inheritance taxes, and next November, Gov. DeSantis will ask voters to eliminate property taxes, too. He’s not alone: Marjorie Taylor Greene, Vivek Ramaswamy and other conservatives across the country have proposed the same for their own states. The anger is justified — but poorly targeted. Only half of the property tax is bad: the half that punishes people for building and improving their homes. The tax that falls on the land beneath those homes is different. In fact — historically, and today — it’s the most conservative tax.
For most of the 19th century, the federal government collected no income taxes; when Congress imposed one in the 1890s, the Supreme Court struck it down as unconstitutional. It was only after the passage of the 16th Amendment that the U.S. began to incorporate labor taxes as a serious part of its funding mix.
The general sales tax is even younger, first taking root during the Great Depression as collapsing incomes and property values provided little juice per squeeze. Neither are optimal: Income taxes discourage work, while sales taxes fall harshly on the poor, who spend a larger fraction of their incomes on consumption.
Property taxes, on the other hand, have been in place since the founding of the country, though they far predate that. (The eisphora, an Ancient Greek property tax, was first imposed in 428 B.C., during the Peloponnesian War.) They combine a tax on built structures with a tax on underlying land. While the former disincentivizes construction, the latter is non-distortionary: Unlike taxes on labor, investment or goods, no tax can decrease the supply of land. Adam Smith noted that a land tax could not be passed on to tenants, and described it as an optimal source of revenue. Karl Marx spurned land taxation as “the capitalist’s last ditch.”
The most famous advocate of pure land taxation was Henry George, a fiery 19th-century populist. His 1879 book “Progress and Poverty” likely remains, to this day, the best-selling work of economics of all time. George argued that all taxes should be abolished, leaving only a tax on unimproved land value. People, he held, have a right to the fruits of their labor — but God, not any individual, created the land. No one should pay taxes on the value of their homes, but the value of the underlying site is created by its proximity to communities. Those communities had a right to tax the value they’d created.
In the 20th century, George’s crusade was taken up on the American right. Albert Jay Nock, one of the first self-described “libertarians,” praised the land tax as the only just tax. William F. Buckley, the founder of National Review and one of the most important public intellectuals of his time, described himself as a “closet Georgist.” Even the economist Milton Friedman declared that the land tax was the “least bad tax.” He’s not alone: The land tax is still a favorite of economists across the political spectrum for its neutrality, transparency and efficiency.
Today, if you build a new home on an empty lot, or replace a blighted house, your taxes will increase. Renovate the kitchen, and they’ll increase again. The state punishes homeowners for investing in their communities, and DeSantis is right to reject that. But if all property tax revenue disappears, other, worse taxes will have to make up the gap. A better approach would be to abolish the levy on homes, and preserve the levy on land — the least bad, most conservative tax.
Reed Schwartz holds a master’s degree in intellectual history from the University of Cambridge. He lives in Washington, D.C.
