One of the many reasons former Vice President Kamala Harris was soundly defeated in her 2024 presidential campaign was her support for a perennial Democrat proposal to tax unrealized capital gains—conjectural increases in the value of unsold assets. But the reality is that millions of Americans already pay a similar tax on “paper gains” based on the estimated value of their homes.
Such taxes are not only an affront to the concept of private property, but they have now become such a burden to homeowners that some Republicans are leading a movement to dramatically reduce or abolish them altogether.
Property taxes have been rapidly rising in recent years as the appraised value of houses has skyrocketed. This development has been particularly devastating for middle-class Americans, who must pay these taxes year after year despite having never sold their homes.
On a fundamental level, property taxes are an assault on the financial independence of American families. The American Dream, at its core, is about property ownership. Those first settlers who risked everything to board rickety ships and cross an ocean did so for many reasons, but property ownership was chief among them.
Property taxes effectively render the term “home ownership” meaningless in the United States. How can one truly own something on which he must pay the government a certain sum of money every year, or else the government will come and take it from him at gunpoint?
Because property taxes are indeed taxes on unrealized gains and most property “owners” understand that all too well, there is growing pressure from taxpayers to eliminate them. This is particularly true in states to which many have migrated to escape the increasingly incompetent Democrat governance in blue states like California, Illinois, and New York.
A top destination for these political émigrés is, of course, Florida.
Not coincidentally, Florida Gov. Ron DeSantis (R) is leading a high-profile effort to curtail property tax inflation. According to a report in Newsweek, “DeSantis has said that he is working on a ‘concrete proposal’ to drastically cut or even eliminate property taxes in the state, an initiative that he has pledged to put before voters next year.” DeSantis must amend the state constitution to eliminate property taxes altogether. Consequently, he is working with state lawmakers on a ballot initiative for 2026 and says the legislature is fully on board.
How does domestic migration from poorly governed blue states to well-run red states drive up house appraisals and spikes in property taxes? The value of houses, like everything else, is a function of supply and demand. If the demand for houses in Florida rises faster than the supply of homes for sale, the value of the latter inevitably increases. This is precisely what has happened in Florida and many of the other 22 states in which Republicans enjoy governing trifectas.
Still, increased demand for housing in red states only explains half of the problem.
In a healthy economy, unencumbered by perverse incentives, a spike in demand for housing would motivate builders and developers to increase production. Before long, the quantity of housing would catch up with the quantity demanded. The resultant equilibrium would end the upward spiral in the appraised value and property taxes for existing homes.
Why didn’t that dynamic manifest itself to prevent the current situation? In a word: Bidenflation. When inflation blew past 9 percent in 2022, the cost of building new homes became prohibitive.
It is no coincidence that widespread property tax revolts broke out only twice in the last 50 years – when inflation skyrocketed during the Jimmy Carter presidency in the late 1970s and during the Joe Biden presidency in the early 2020s. Inflation comes with perverse incentives that go beyond the prohibitive cost of the materials and labor needed to physically build homes. The elevated interest rates imposed by the Federal Reserve to control inflation also reduce the amount of money banks can risk on speculative construction loans to builders.
The high interest rates imposed by the Federal Reserve also put upward pressure on mortgage rates. This means that first-time buyers are having difficulty qualifying for loans to buy one of the few homes available on the market. High interest rates also serve as a disincentive for current homeowners to sell houses they bought before Bidenflation arrived. Why would any sane homeowner with a 3.5 percent fixed-rate mortgage sell their house knowing they will very likely be forced to pay double that rate on their next house?
Yet, as The Wall Street Journal’s Will Parker explains, that current homeowner is still getting hammered on property taxes. He discusses it from the perspective of someone who bought a house as recently as 2020: “You hadn’t seen the huge takeoff in prices yet, and you still could get a mortgage for less than 4%. So he did that. But since that time, the value of his home has risen quite a lot. And he finally got a new tax assessment that told him that your house has risen about 30% in value, and so your tax bill is going to be 25% higher now.”
Growing anger over this dynamic has caused a number of states to offer some relief to homeowners. In 2023, these states passed statutes curtailing property taxes: Arkansas, Colorado, Indiana, Iowa, Missouri, Montana, Nebraska, North Dakota, Pennsylvania, Texas, and Wyoming. In November of 2024, ballot measures to cut taxes for property owners also passed in Arizona, Florida, Georgia, New Mexico, and Virginia. Conspicuously absent from these lists are states with the highest property taxes: New Jersey, Illinois, New Hampshire, Connecticut, and Vermont.
State actions are useful, but as Florida Gov. Ron DeSantis points out, “Property taxes are local, not state. So we’d need to do a constitutional amendment (requires 60% of voters to approve) to eliminate them (which I would support)… taxing land/property is the more oppressive and ineffective form of taxation.”
Some of the growing backlash against property taxes may be a result of the demographic shift ongoing in the United States. Jay A. Soled, chair of the Department of Accounting and Information Systems at Rutgers Business School, opines, “As America greys, there may be increasing pressure to reduce property taxes.”
A recent conversation your humble correspondent had with his 12-year-old grandson perhaps provides a clearer glimpse into the “common sense” argument against property taxes. Having been told that people who worked all their lives to pay off mortgages in order to own their homes free and clear still must pay city, county, and state taxes on that property, his response was unambiguous: “That’s stealing.”
He has no grey hair, but it’s difficult to gainsay his succinct and wise observation.
David Catron is a Senior Editor at the American Spectator. His writing has also appeared in PJ Media, the American Thinker, the Providence Journal, the Catholic Exchange and a variety of other publications.
Amen! It is stealing. Especially when the government can seize your home if you don’t pay the property tax.
And if you’re a single homeowner like me, those taxes go to pay to indoctrinate, er, “educate” OTHER PEOPLE’S KIDS! Salt in the wounds.
I never thought about property taxes as unrealized gains— which I’ve heartily disapproved of in the past— but you’re right. ALL governments, local, state and federal need to cut back, slim down and stop thinking they are the reason people exist.
I have ALWAYS believed property taxes are stealing and if scotus actually did the right thing they would be ruled illegal. Pay a sales tax on first purchase, that’s fine, but continually paying a tax on something is just wrong. If you sell it again, the sales tax has to be lower than the original since the original tax is more than likely embedded in the mortgage loan. The fact non property owners can vote to tax property owners, with bonds, bailouts, etc is just ridiculous. It needs to go away.
Good explanation. I hope this passes. I live in rural Georgia and have 175 acres of family farmland. We don’t have a mortgage but I have had to go back to work part time to pay the property taxes and insurance.
The permanence of property taxes makes them unconstitutional because one can never truly experience “Life, liberty, and the pursuit of happiness.” When the mortgage is paid off the taxation should end.
As long as there is a tax on property, you can never really own it!
Nobody likes property taxes but what are cities going to to to pay for public schools, street repair, garbage collection, and police and fire protection if property taxes are eliminated ?
Montana has offered a rebate the last few years and I has been successful. It is great for seniors with lower incomes that live in smaller or less expensive homes!
David, what a great article, and this Governor DeSantis is so correct in his thoughts of abolishing the “property taxes”. There is a time to tax, but this continuation of annual or bi-annual tax burden on a property, is simply unconstitutional in my opinion. Private property is never had, when the threat of losing it, if you fail to pay your taxes hang in the balance.
There are better ways to support government, than just putting it all on homeowners. If anyone ask, I could give them at least five better and more constitutional ways to support our governing.
This should also apply to capital gains on non-retirement investments like mutual fund capital gains that are not paid in cash but instead reinvested in additional fund shares. Every December when my non-retirement mutual funds pay annual capital gains, this happens to me, and my AGI goes up dramatically despite never seeing a dime. Then it messes with the amount of my monthly Medicare premium because it puts me in a higher income bracket so Social Security deducts more for Medicare than the regular premium. I get screwed for trying to ensure I have enough retirement savings beyond my rollover IRA. Maybe this is something AMAC should address with the Trump administration. President Trump is all about fairness, and this doesn’t seem fair to me.
U.S. income tax in the early 1950s was up to 95%. Many were in the top bracket but few paid the 95%. They invested in buildings, businesses, services, etc., and got full dollar tax deductions. That drove the economy, and just after WW II and for the next 15 or more years, was the best economy the US ever had. With the highest rate but most invested in something for a deduction for full dollar deduction, and drove the economy.
The wealthy were truly job creators then, but now the top rates are so low there is no incentive to invest and get a large deduction. The tax cut for the wealthy is the same as giving them a large bonus deduction on their tax return. We must reinstate the high rates to have money to pay down the debt, which, with the latest new big bill borrowing, will be about 40 trillion dollars. We now pay about 952 billion in interest yearly, and with the new debt, the interest will be about ONE TRILLION in interest every year. That money would wonderfully serve the USA in so many good ways. Instead, we have chosen to have the wealthy and largest corporations accumulate wealth that all Americans could enjoy. Instead, the top 5-8% have decadent wealth and pay less than their share of taxes so we, the rest of us, get to struggle and pay proportionately much more in taxes.
My poor mother was on social security at 90 years old in CT and was still forced to pay upwards of $10,000 a year in property taxes! Just how many times over do you have to pay for your property before the government tax-sucking proboscis disengages and leaves you in some financial peace in your twilight years?!
This is a great idea and would certainly help me. However, states like Texas do not have an income tax and their primary source of income is property tax. If it is eliminated, altogether, sales tax won’t be much help to fill the void. Do those states resurrect the income tax?
Cities and counties use property taxes to pay for schools, police, fire, and other services for those residences. Taking away property taxes will require a raise in sales tax for some other tax to pay for those services. How do those cities and counties pay the bills including payroll for services?
Are we prepared to do without the things that these taxes pay for?
Property taxes should at least cap out at some point, or stop after someone has owned the home for a length of time. They can make home ownership unaffordable. They can easily get to be hundreds of dollars a month. Even thousands.
Tennessee has a revenue-neutral property tax system following re-appraisals.. My property tax bill actually went down following the 2022 re-appraisals. How is Gov DeSantis proposing to offset the revenue from the property tax cuts?
An alternative idea is that property taxes paid provide local, state and federal services supporting citizens, individually and collectively. Services are expected. They must be accounted for. Since every citizen and resident of the U.S. receives the benefits of these services, taxation must be expanded (specifically) to include renters and those who hire real property relative to the taxed value of the property contracted, to lessen the burden of
real property-owners who have facilities for hire. Spread the wealth? Spread the responsibility for securing the services which maintain it.
Property taxes are killers, going up and up ,not for those who are grandfathered in .
Right. We will NEVER own our homes after paying and paying exorbitant amounts on mortgages most of our lives; when we hafta pay MORE exorbitant fees to a corrupt government for the ‘privilege’ of living in them. ENOUGH!
Thank you David, bravo! This talk about eliminating property taxes may all be a pipe dream, but nevertheless it’s a very satisfying pipe dream. A couple years back I had the wonderful pleasure of paying off my mortgage, which was even more satisfying than my wife and I dreamed it would be. But alas, this past year when all this talk (mostly from DeSantis) started about eliminating property taxes, it hit me like a ton of bricks that Ron was right…as long as I was paying property taxes on my house I didn’t really own it at all. That was a bad day for me.
Property taxes is stealing. Stealing money from hard working people to fund a government and school system out of control and running amok.
In GA, Gwinnett County for sure, they have found a way to increase property taxes. Most have gone up 10-15%. This is after the vote against property taxes on State and local ballots.
What you really own is the debt created by the illusion of being a homeowner. Government essentially owns your property and will foreclose if you fail to pay them. The other issue is that people who vote that don’t own property can essentially raise your property taxes in every election and since it costs them nothing, they don’t care. Don’t get me started on the DMV nevermind, they too own your car, they just let you use, maintain and insure it, only if you pay them their fees. Isn’t the government magnanimous?
This is one of many rip offs we the people suffer. Another is,well find out for yourself. Find out what happens when you or your Spouse passes away ? Where does the money go you have paid in for SS? To your Children Nope unless the are disabled. To the survivor Nope Unless you will draw less than them and then it only enough to make the difference. Don’t take my word for it look it up please.
Add Washington State to the list of property tax oppressors. Wash Democrats passed a law allowing communities to triple property tax increases (from 1% to 3%) without having to secure voter approval. Among other projects, that’s likely one way they hope to fund their reparations bill for first time home buyers of African descent.
All tax other than income tax should be removed. Many places even tax you to have a garage sale.
No more property taxes:
I worked long, hard hours for sixty years. I went to work when I’d rather be doing other things. I spent my money on a house. I make more money than ‘low income’, in part, because I worked.
As a result, I find myself having to spend more money for just about everything as opposed to if I’d worked less my whole life. The ‘low income’ receive thousands and tens of thousands of dollars in assistance and discounts. The assistance is paid on the backs of persons who worked very hard to carve out a better life.
The Bible says that we will always have the poor with us, but the Bible also instructs “if you don’t work, you don’t eat”.
There is little incentive other than knowing one has personal integrity to work towards middle class status. There are too many persons positioning themselves for handouts and too few persons pulling themselves up by their bootstraps towards living the American Dream.
Perhaps if the work ethic were revived, we would not require such a heavy tax burden. The question is not “What will we do if we don’t tax more?”. The challenge should be “What is expected of each of us and are we each working toward that end.”
You will never pay off your home. The taxes just become another mortgage.
Don’t think it is just property (or business) owners who pay property taxes. Property taxes are part of the cost of doing business and incorporated into the sale price AND into the cost of rentals. That cost is passed on to the tenant. It is actually the tenant who pays the tax, not the property owner. It is the consumer who pays the taxes, not the businesses that provide the goods and services.
That’s half of the problem. The other half is the fact that the CCP and other foreign enemies are paying far higher than market value to buy up our real estate, not to mention our farm land.
While taxes can be a necessary evil taxes are now a form of idolatry along with homosexuals, entertainers, politicians, etc.
OK, it’s all smoke and mirrors in the long run. The state, county and city or township besides the federal government need money. The feds get first draw, they take it right out of our pay check, as does the state for those states who have an upfront tax. Everyone else has to steal our money by some form of tax to pay for the services provided. Property tax, car registration, gas tax and sales tax to name only a few. It’s simple, you pay less, you get less. You pay more you don’t get more – everything cost more. So this is kind of a lose/lose system that we’ve tolerated for decades and to tell you the truth, I don’t see a fix to it. But I know this, defunding emergency services (police, fire, ambulance) ain’t the place to start.
It is Stealing. I live in Georgia and they have raised my property taxes for the last two years. Last year they raised it $700 and this year another 28 percent this year. I own my house and land, but I can’t afford property taxes, so will more than likely have to sell to keep from loosing it before long. The only problem, is where will I move to!! Everything is so high. There are a lot of seniors that are loosing their houses due to property tax. It is wrong.
The Govenors all like to blab about working on property tax reduction. Texas Governor said he signed a bill that sogniofocanly lowers property taxes for seniors via higher homestead expmptions. Probably not worth much as the taxing agencies just raise valuations and the taxing entities raise the tax rate. All politics. Gov DeSantis probably has a brilliant idea but still, just politics. Who you gonna believe?
I was paying $286 in property taxes where I lived. I moved to Wichita Falls and had to pay my taxes with a credit card as they were $1,400. I filed exemption because I am 82 years old. Why are the taxes so high here.
when I lived in pennsylvania the property tax was to support the schools, I don’t know what other states due with the taxes they collect.
Where I live property taxes are used to pay for schools. If property taxes are repealed how will the schools be paid for?
Axe them nationwide ( alas save Blue States)
as long as we can defend ourselves against the world scum organization home and abroad et al first and drive gas engine cars.
How about parents with school-age children pay school taxes exempting retired people?
I agree we should not have to pay every year or at all !!! seem ya still just renting even if you can be sued or held accountable if someone get hurt on you land
Well, out of the mouth of babes…………. Smart grandson.
Even for those of us over-65, if one is in a MUD jurisdiction (most MUD’s don’t participate in the over-65 cap), we can’t have any relief and have been paying forever (a few MUD’s have a finite-in-years life and do end).
yes, get rid of property taxes!
elect those that can pay for schools, police etc. less property taxes.
What is the difference between Communism and what we have? In both the state owns everything.
This article is somewhat of a fantasy. Property taxes go to help pay or pay for public schools. No property tax means unfunded or underfunded schools. Since the Federal dept of Education is being dissolved, the states will be the sole source for education funding. So, no property tax means no state funding. It cannot be done without crippling public education. Maybe the wealthiest want an ignorant and uninformed public, so we will be easier to dupe into paying too much in taxes. The tariffs are a way for all up to and including the middle class to pay down the debt while the wealthy still enjoy massive tax breaks. When that gets into place, the US will be two-tiered like India. The well off and the unclean. Taxing the well off and a minimum corporate profit tax is the only way we can come out of this mess with any semblance of equity for the lower and middle-income citizens. A different topic might be the restructuring of property taxes in Florida, which now favors those who have bought and held property and punishes the recent homebuyer with the highest rate.