There is something fundamentally wrong with being forced to pay property tax on our homes. Why? Because being forced to pay this tax means we as homeowners will never actually “own” our homes, even after we pay off the mortgage. Paying property tax on our homes is equivalent to paying rent to the government – forever.

     Few American tax schemes are more unnecessary, unpopular, and just plain unfair. Consider this typical scenario: You played by the rules all your life, worked hard, married, provided for your family, paid your bills on time and avoided living beyond your means. You retired several years ago and are currently living on a fixed income. You’ve managed to “get by” okay but it seems harder and harder to come up with the several thousand dollars to pay your property taxes each year. Then you experience a financial setback – your car breaks down or you discover extensive termite damage to your home. You scrape together enough money to pay for the repairs, however, because you’re living on a fixed income, you fall short when it comes time to pay your property taxes. You become worried that you might lose your home. Since you’re on a fixed income, a bank loan is out of the question.  You have nowhere to turn and, as a result, you become delinquent on your property taxes. Eventually, you receive a nasty letter from the government informing you it has decided to sell your property in order to recoup unpaid taxes. To avoid losing everything, you sell your home for less than it’s worth and move into less expensive dwellings.

     Regrettably, for many senior citizens, this particular scenario is all too real. Thousands of seniors across America are forced to sell their homes each year due to delinquent property taxes. And what’s so unfair is the fact that most haven’t had children in school for decades, yet, they’ve been forced to pay property taxes in order to fund the local school system. Meanwhile, a family down the street living in an apartment or government-subsidized housing has never paid a single dime in property tax and therefore, never actually contributed directly to their own children’s education in the form of property taxes revenue.

     Even the Supreme Court of the United States agrees that funding education through the current property tax system is unfair. In a landmark case involving the “right” to an education – San Antonio Independent School District v. Rodriguez (1973) – the Supreme Court stated, “[W]e are urged to direct the States either to alter drastically the present system or to throw out the property tax altogether in favor of some other form of taxation.”

     There is a better way.

     We can start by phasing out property tax requirements on non-income producing properties (i.e., our homes) beginning with senior citizens. That revenue can be generated, instead, through sales taxes with certain categories of products, such as food and medication, being exempted. Since sales tax revenue is subject to fluctuation, we can index revenue projections to an indicator of economic activity such as annual retail sales. In the event that revenue collection is down, we can implement a mid-year adjustment of the sales tax amount in order to bring collections in line with projections by year-end.

     This system would be more equitable in that all consumers contribute to revenue collection, whether they own a home, rent, or live in government-subsidized housing. The individual tax burden would be reduced by being spread among a larger pool of taxpayers. The infrastructure to collect the taxes is already in place in the form of cash registers at retail sales establishments. Further, by having a steady stream of income throughout the year rather than a single influx of money at year’s end, the state would save money by avoiding interest fees on money borrowed to fund the school system during the year.