RE: High Property Taxes Are Good, Actually

commentary on Brock Whittaker’s post on interest rates and real estate speculation

Wed, 20 July 2022

From Brock Whittaker:

Interest rates are centrally controlled and affect nearly every major industry, so even small changes can have large knock-on economic ramifications.

Property taxes on the other hand, can be scoped as narrowly as a single county or town, or as broadly as a state. They can be adjusted annually based off the needs of a local market. On an individual level as well, property taxes can be adjusted by local municipalities. Retirees and low income individuals are often able to make cases to reduce their tax burden, leading to increased home affordability. And perhaps, the best attribute: the money collected from property taxes doesn’t evaporate from a local area like it does when borrowers pay higher interest rates. It goes back into the local neighborhood, leading to better local infrastructure and higher quality schools.

I’m kinda curious as to how this helps the average worker afford their own home instead of being stuck as a renter1. I wasn’t able to put together a down payment until I was almost 40 under the current status quo. Perhaps if home prices fell to compensate for higher property taxes it would balance out, but I don’t think home prices will fall until we’ve buried the last of the Baby Boomers.

Furthermore, aren’t property taxes fundamentally regressive taxes since they aren’t scaled by ability to pay and thus hit cash-poor householders harder than their richer neighbors? For example, a 2013 report suggests that low-income Pennsylvania citizens pay a much greater portion of their annual income in local and state taxes than the richest among us. In fact, Pennsylvania was one of the 10 worst states for regressive taxation in 2013, and I’m not convinced the situation has improved much in the past decade.


  1. To be honest, I still feel like a renter despite being five years into a thirty year mortgage. The bank is my landlord, but at least I don’t have a neighbor’s bedroom right up against my own any longer. And once I’ve paid off the mortgage, I’ll still have to pay rent in the form of property taxes. Renting never really ends; the conditions just become slightly less onerous if the deed is in your name.↩︎