Mdthbs

I know that people living in comunities cooperate with each other when it comes to expenses to maintain the comunity.

From a historic point of view I understand that taxing property is a practice that started since before recorded history.

The difference between then and now is that governments in the past have always taxed property (land for example) according to what it was producing. If your land was producing apples, you'd be required to give some apples to the government. From what I know people were never required to give pears or diamonds if their land was producing apples.

Now we have to pay money if we own a house even if the house does not produce money.

Can someone please explain how I could make sense of this? What would be a logical explanation (other than "because we need it")

Possible explanations and the reasons I have a hard time making sense of them:

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  If you sell your house, then your house "produces" money.

  
  
  
  
  
  • The question that should follow would be: "Why not wait until I sell it? Why charge tax every year?"
  
  
  
  


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  You could rent part of your house.

  
  
  
  
  
  • If that is the case, wouldn't an "income tax" make more sense? (We would avoid charging people that do not have enough to sustain themselves)
  
  
  
  

If a location is needed for the question to be complete, please pick a country of your choosing (out of the 99% of the countries where the governments charge money for owning property)

There are two issues with your question. The first is that you're approaching this from a wrong angle. The question is not how or whether a property tax is justifiable or justified, but rather how or whether its modern variation came into existence with any kind of sensible rational. The second is that your idea of there being some kind of barter system is misguided.

With respect to the barter system thing, that only exists in economists' wet dreams. David Graeber in Debt the first 5000 years makes a rather interesting case that the sequence whereby barter preceded currency and then debt instruments is fantasy. Rather, the actual sequence was that debt instruments preceded both and that barter and currency (in equal measures to a large degree) then came in as units to settle those debts. And there is ample evidence that early currency instruments were basically fiat and really just records of IOUs.

As to the first problem, historically, authorities have taxed just about anything they could creatively tax, with the main two drivers for doing so being a) whether they could come up with a metric by which they'd tax it (and check it's being paid) and b) whether they'd end up with a revolt on their hands if they tried it.

In agrarian societies like the early Roman empire, at a superficial level there wasn't much to sensibly tax beyond wealth for owners (aka land) and labor for peasants (think serfdom). The metric for the latter was simple: a certain amount of time per year. For the former, it was more complex and revolved, as you suggest in your question, around how "well" the land was developed. But only to the extent that land that produced something deemed valuable was seen as worth more than land that didn't. And this was actually a debt obligation in principle, even though it may have looked like it took the form of barter in practice.

There is more, because the above is somewhat superficial. Then, and later, there were plenty of other very creative taxes -- some progressive, most regressive. Think public urinal tax (by an emperor after which the French sometimes call their urinals), salt tax (salt was a necessity until refrigeration), hearth tax, window tax, glass tax, brick tax, wallpaper tax, you name it. The guiding principle in each case was: if a tax assessor can easily count it, then you can tax it. It's only in the modern era that taxing flows, as in profits, income, and consumption, came about. Before that, taxing wealth was the rule.

And it's also worth noting that, in the past as now, there were "emergency" taxes that sometimes became routine. Charles I of England, for instance, worked around not wanting to call Parliament to get it to raise taxes by all sorts of measures -- some legal, some not (he was time limited for customs, but levied them anyway and merchants paid out of habit). The most colorful ones might be his declaring a state of emergency (there was none) to levy naval vessels from coastal communities (you'd pay the price of a boat if you couldn't provide one) and extending the levy to non-coastal communities (a first at the time); or unearthing a by then long forgotten tax on living outside of city walls. He even won court battles as he pushed this through. The English were so pissed at him that it triggered the English Civil War.

Anyway, back to your question:

Can someone please explain how I could make sense of this? What would be a logical explanation (other than "because we need it")

The simple answer is: because, then as now, you can readily tax it.

I think Denis de Bernardy's answer is very good. However, there is something else worth mentioning, in terms of the 'justification' for taxing property:

A house, in particular, isn't just an isolated entity - it is usually part of a town or city, where it will be benefiting from shared infrastructure and services. Those need to be paid for somehow, so it would seem logical to pay those 'shared costs' by taxing the property.

For example, in the US, let's say a house is part of a town. There will be, for example, roads, sewer system, electrical power infrastructure, garbage disposal, fire department, which the house and anyone that is living there will be benefiting from. So, those shared costs are paid for through the town taxes.

That town is also part of a state, which will have its own roads that it maintains; state-level power infrastructure; police force for security, etc etc. Hence, there is a justification for a state tax.

Then, of course, that state is part of the USA. That also provides national-level services, such as a military for defense; FBI/CIA to investigate crimes and enforce the law; justice department and federal courts/supreme court; other Federal departments to manage various things; Congress to make laws and decide policy; etc etc. So, there is a justification for a Federal tax.

So, in general, the justification is that these different levels are providing many shared services that need to be paid for, and taxes on property are one method to try to fairly distribute those costs. Although, it should be mentioned that it is not the only method available.

You're paying for the government to defend your property (among other things.)

One of the services that most governments provide is that of stopping invading armies and marauding gangs of criminals from marching in and taking your property away.

That is to your benefit, and your benefit is proportional to the value of that defended property.

As such, you pay a fee for these services rendered.

In the late 1980s in the UK, the Conservative government decided that they would break the traditional connection between property rental value and local taxation. Instead of people paying tax according to the value of their property, each person would pay a flat rate in return for the services provided in that district. It would be called the "community charge" (but soon became known as the "Poll Tax"), and each adult would pay the same.

The result was widespread public disorder and the Prime Minister (Margaret Thatcher) was removed by her own party. It was a massively unpopular taxation system.

It was also difficult and costly to collect, as people had to register for the tax. Whereas a house is a fixed structure, people tend to move around. It was an administrative nightmare to keep track.

It was unpopular because it meant that a millionaire in a mansion would pay the same as a single parent in two room apartment. The principle of progressive taxation is that one pays in proportion to your ability to pay, not in proportion to what you receive.

The logic behind taxing property is the strong correlation between the value of one's property and the ability to pay tax. People who are rich tend to buy valuable property. People who are poor tend to live in lower value housing. If you are taxing residents of a district, and you want to assess their ability to pay a tax, using the value of their home is a relatively simple way to do it.

The result was a return to a property tax, with every house being assessed and put into a band. Taxes would then be raised according to the band your house was in. So a person with the money to live in a mansion would pay more.

The political logic is that people are much happier to pay progressive taxes that take more money from those who are most able to pay.