The History of Property Taxes in U.S.

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The History of Property Taxes in U.S.

Taxing our property provides a financial backbone that supports public services and local governments. This method of taxation has developed in the United States with many twists and turns over the years, but it remains a staple of support for society and the services that we enjoy.

  1. Colonial Period

    • In the early 1600s when Pilgrims came to Plymouth, Massachusetts, they were in need of revenue to support their educational system and the church. To meet this need, they made a decision to impose a tax on all personal property. The church would receive these funds and it would remain in control of their use and disbursement.

    Revolutionary Period

    • As our country grew, the need for a centralized form of government came with it, and so did its need for money. During the Revolutionary period, the Continental Congress was spending money at a faster rate than it was receiving it from taxes. The colonies agreed to raise the property tax rates to help alleviate this issue, yet congress still spent more than it would receive and had to borrow the money to operate.

    National Property Tax

    • In an attempt to raise funds, Congress would propose a new form of taxation. During the formation of the U.S. Constitution, a debate broke out over an attempt to initiate a national property tax. Rich Southerners quickly pushed aside this concept because they felt their large estates would be subject to unfair taxation.

    Window Tax

    • Another attempt to impose a national property tax came with the John Adams administration. President Adams was certain a war with the French was unavoidable and he would need money to support the troops should war erupt.

      To fund the inevitable war,, he enacted a window tax in which the assessor would impose a tax on real estate based on how many windows and doors the property had. Settlers rebelled and attacked the assessors as they made their rounds. Hearing of these attacks, President Adams rallied the troops, had the perpetrators arrested and a Pennsylvania court sentenced them to death.

      John Fries, the leader of this group, was among those receiving the death sentence. Citizens rallied for his support and placed pressure on the governor of Pennsylvania to repeal his sentence. Due to this pressure and some inconsistencies in the trial and arrest, the governor chose to release him. The repeal of this national tax came shortly after the trial.

    Great Depression

    • During the Great Depression, states continued to tax property, but with so many people out of work it became impossible for assessors to collect the tax. Many states cut the rates of these taxes and chose to impose additional sales tax instead. This action would help stabilize the local government, and restore public services. Property tax relief was only temporary; as the U.S. economy grew, so did the rate of this tax.

    Property Tax of Today

    • According to Richard Carlson's "A Brief History of Property Taxes," property taxes "today account for less than 75 percent" of the tax revenue that states raise. Local governments continue to collect and distribute these taxes, using the funds to support public services, such as police, schools and sanitation.

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  • Photo Credit Melodi2, morguefile.com

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