Unmasking the Truth Behind Property Taxes: Do They Favor the Wealthy?

By Dr. Brooks Robinson\ Black Economics.org

In the intricate world of economic games ruled by Economics’ “High Priests,” property taxes stand as a pivotal player, yet concealed within their seemingly mundane calculations lies the potential perpetuation of inequality. Property taxes, a major revenue stream for local governments, remain a subject of opaque complexity masked by layers of economic jargon and methodologies. But why are these systems consistently designed to favor the wealthy?

The Veil of Complexity

Economists, often held in high esteem, created complex systems under the guise of logic and fairness that actually obscure the underlying unfair structures. According to Black Star News, property taxes alone accounted for over 70% of all local taxes collected in the US in 2022—a staggering fact emphasizing their importance. Yet, as we uncover, those who can pay well—namely, affluent property owners—constantly benefit from these tax systems at the expense of the less wealthy.

A Discrepancy in Methods

The common practice of using “assessed value” rather than “fair market value” when calculating property taxes raises significant questions. Local governments often shy away from fair market valuations, maybe due to historical conventions or for fear of losing revenue. This archaic system inadequately reflects the real-time, market-based value of properties, allowing certain owners a tidy advantage.

Questioning the Fairness

As we dissect the tax assessments, several unexpected truths surface. Many current systems fixate on an outdated assessed value. This approach artificially inflates or deflates taxes in a manner that grossly ignores today’s economic realities. The shift to a fair market valuation is long overdue but remains frozen by politics and tradition.

The Wealth Inequality Connection

One of the starkest revelations is how property taxes contribute to wealth inequality. Those in lower-income brackets find themselves trapped, burdened by taxes unrelated to actual market conditions. Meanwhile, owners of rental properties in these areas can exploit this dissonance, reaping excessive income while paying less than their due tax burden.

A Call for Transformation

With our world rapidly advancing in technology and processes, it is untenable for governments to cling to outdated methods. The integration of fair market value assessments should be a priority, aligning tax policy with equitable governance principles. This shift promises a fairer distribution of tax burdens and a responsibility to upend embedded inequality patterns.

Economists’ role as “High Priests” overseeing these games must evolve to embrace transparency and fairness. By doing so, we tackle not only outdated tax methodologies but also break down the broader socio-economic inequalities they uphold. The question remains: Will policymakers take steps toward a just system that serves everyone equitably, or continue to favor the status quo because they can?