“It’s a nice home you have here…”
In the movies, it’s called “extortion” — pay us what we require, and nobody gets hurt. But, when the government does the same thing regarding you and your home, it’s called a “property tax.” Nobody truly owns their home when the government demands taxes be paid on it with the threat of confiscation for nonpayment. Property taxes are extortion and unbecoming of “conservative” Idaho.
Some Background
Presently, Idahoans are reeling from Biden-inflation — over 25% in the last five years — while their wages are slower to catch up. We are in a classic wage-price spiral: prices go up, wages catch up, driving prices up more, then wages again, etc. Idaho families need relief, and they need it fast. The good news is our Legislature possesses the tools to provide the most dramatic and immediate help for families. Cutting taxes gets the burden of government excess off families’ backs.
Let’s talk about those possible tax cuts. Across Idaho, ask folks which tax cuts are most important to them. Two taxes are always at the top of the list: grocery tax repeal and property tax. It’s not even close.
The case for grocery tax repeal is well-documented and Idaho is one of only four states to fully tax groceries, and it should be at the top of the tax cut list along with property tax reform or repeal. But let’s take a look at property tax realities and possibilities.
Here are three key points about property taxes you should know:
Property Taxes are Theft
To live, people need the basic elements of survival: food, shelter, and clothing. Government was created to protect rights, not to threaten them. Because people must eat to live, grocery taxes are objectionable. Because people need protection from the elements, property taxes on homes are objectionable. Okay, we haven’t talked about clothing, but similar arguments could certainly apply.
Government should not require anybody to pay additional money in order to keep their God-given rights unmolested by the self-same government. In fact, it exists for the opposite reason: to protect our rights to life, liberty, and property. If you own your home but can have it taken from you for nonpayment of taxes, then you don’t really own your home, do you? You are simply renting it from the government, under threat of permanent eviction.
Indeed, property taxes are the threat of government taking property for lack of payment. Government steals either your money (taxes) or your home. You have no choice.
Taxing Unrealized Gains
During the 2024 presidential campaign, candidate Kamala Harris drew criticism for proposing taxes on unrealized capital gains (UCGs). UCGs are what happens when you have stocks or assets that grow in value (on paper), so your wealth increases even without you selling the stocks or assets. You became richer in accounting terms, but you didn’t “realize” or reap the gains yet. Kamala wanted to require tax payments on such increases in wealth.
Taxing UCGs is objectionable because those gains aren’t actualized until the assets are sold. In fact, the gains may never be “realized” because if the value of the stocks went down again, then their holder was never actually wealthier.
Property taxes treat homeowners the same way. When home prices go up, your house is “worth” more, but if you never sell your home, you never actualize the gain in wealth. Property tax policy makes no distinction, however, and you must pay the taxes on the unrealized property value gains to keep your home.
This is particularly hard on families with fixed incomes — such as seniors, those on welfare, etc — especially when Idaho house prices rose by 118% in the last five years. It may be impossible for them to pay taxes on their property because its value increased so much. Some families had to sell their homes because they couldn’t afford the higher taxes on the homes they completely owned. That should never happen in Idaho.
A Zero-Property Tax Roadmap
We at the Idaho Freedom Foundation (IFF) have already provided a roadmap for repealing the property tax in Idaho. Yes, the Idaho Legislature could (and should) repeal the property tax if it only had the courage and will to do it.
Fred Birnbaum, IFF Legislative Affairs Director, outlined very clearly how, if we simply limit government spending to inflation and population growth, we could create enough space in our sales tax and income tax collections to completely abolish property taxes in Idaho in just 10 years — before making any cuts to government.
Conclusion
Because property taxes are so immoral, objectionable, unfair, and problematic, the Idaho Legislature should eliminate them entirely. It starts by limiting government growth, dedicating the difference in tax collections (sales and income) and government spending to property tax replacement. Then we could achieve zero property taxes in 10 years. It’s reasonable, it’s possible, and it should be done.
Great article. A wealth tax. A tax on an unrealized capital gain. An encumbrance on property.
Let's start slowly.
Cut the property tax i half and cut the grocery tax in half.