History

The Property Tax has been used as a source to generate revenue for centuries. It has been used in the country from the beginning.

Over 100 years ago, noted tax economist E.R.A.Seligmana wrote the following:

Practically, the general property tax as actually administered is beyond all doubt one of the worst taxes known in the civilized world. Because of its attempt to tax intangible as well as tangible things, it sins against the cardinal rules of uniformity, of equality and of universality of taxation. It puts a premium on dishonest and debauches the public conscience;…the general property tax is so flagrantly inequitable that it retention can be explained only through ignorance or inertia.
(from his article, Essays in Taxation, as cited in The Worst Tax by Glenn W. Fisher)

In the early days, it was not only land and improvements that were taxed but many other kinds of personal property. Nevertheless, even if your jewelry, art collection and antiques are no longer taxed (except when you die), the inherent inequity of the property tax remains. As stated, “it sins against the cardinal rules of uniformity, of equality, and universality.”

In New Jersey, the Income Tax and Sales Tax were both supposed to be used to offset the Property Tax for education funding. If they had been dedicated exclusively instead of being hijacked by Trenton to pay for everything else, property taxes might just be low enough today that they would only be oppressing those at the lowest rungs of the income scale.

Taxpayer dissatisfaction with property taxes is not limited to New Jersey. A few years back, the Michigan legislature forced itself to come up with a solution by sun-setting the local property tax. As of December 31 one year, the local property tax was abolished. The idea was to force their hand to deal with replacing the lost revenue. They had to come up with an alternate revenue source. Unfortunately, their solution included coming up with a state property tax. Incredible? Yes. Understandable? Again, yes. Why? Because the solution was left up to politicians, it is that simple. They do not have the courage or principled motivation to do the right thing. Those with a vested interest in retaining the property tax combined with their instinct for self-preservation (re-election) kept them from implementing true reform. Unlike our founding fathers who in writing pledged their personal fortunes and lives for the sake of principle, today’s politician has neither such substance nor character. The only thing they pledge is your home.

Today, we stand at the crossroads. New Jersey seems to be poised to be able to actually do something of substance about the oppressive property tax system. At least the political climate is such that it is possible. Past failures (sales and income taxes) temper that hope. But the degree of crisis is so high for so many taxpayers Trenton politicians can no longer slough off this problem.

As the Seligman quotation makes clear: There is no rational reason for the Property Tax to be retained. Hopefully, this website will supply further rationale to eliminate it.

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