In this episode of Tax Notes Talk, Professor Andrew Kahrl, author of The Black Tax: 150 Years of Theft, Exploitation, and Dispossession in America, discusses his argument that local property taxes have contributed to the disenfranchisement of Black homeowners.
Tax Notes Talk is a podcast produced by Tax Notes. This transcript has been edited for clarity.
David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: disparate tax impacts.
Roughly three-fourths of local government funding comes from the property tax, but its revenue-raising potential may have a negative side. Recent scholarship suggests that it has disproportionately affected Black homeowners.
In his book, The Black Tax: 150 Years of Theft, Exploitation and Dispossession in America, Andrew Kahrl examines the history of the property tax and its role in perpetuating wealth inequality. This week’s episode is part of a series we’ve been doing on how tax rules affect marginalized groups.
We’ll include links in the show notes to our previous episodes on the intersection of tax and racial inequality, as well as last week’s episode on tax and disability. But now joining me to talk more about this is Tax Notes historian, Joe Thorndike. Joe, welcome back to the podcast.
Joseph J. Thorndike: Well, thank you very much for having me.
David D. Stewart: Now, I understand you recently spoke with Andrew Kahrl. Could you tell us a bit about him?
Joseph J. Thorndike: Sure. Andrew is a professor of history in African American studies at the University of Virginia. He’s written several books and many articles. And his expertise, besides being about tax, it extends to the history of race and inequality and housing and real estate, as well, believe it or not, as the social and environmental history of beaches and outdoor recreation.
David D. Stewart: And what all did you discuss?
Joseph J. Thorndike: All right, so we talked about an old tax, the local property tax, specifically how it was created and used in the years after the Civil War, and how it’s sustained inequalities and racial hierarchies in America in the last 150 years, especially in the way that it’s been enforced.
David D. Stewart: All right, let’s go to that interview.
Joseph J. Thorndike: Welcome to the podcast. So Andrew, as I read it, your book takes a hard and maybe uncomfortable, even, look at the property tax in America. Uncomfortable at least for the people who rely on it to pay most of the bills of local government.
But I want to start, before I put any questions to you about that, by saying I love this book. Most of the historiography around U.S. taxation, whether it’s federal, state or local, it takes a top down approach. With scholars, typically they focus on policy formulation. They look at the people who make the taxes, the lawmakers, the experts, the tax administrators. And that’s in fact what most of my work has been about, too. But not many scholars have really tried to look at the tax from the bottom up.
Plus your book is deeply rooted in a broader social and cultural context that I think we’re going to talk about here and the realities of American society. In fact, this isn’t exactly a comprehensive history of the property tax in America. There have been other books that tried to do that, including one that’s famously called The Worst Tax, which I thought was also a great name.
But you’ve given us something else. Can you give us a glimpse of that?
Andrew Kahrl: Yeah, well, thank you for having me on and thank you for that really generous introduction. I think you really captured a lot of what I was trying to do with this book, which was to offer a human-centered history of taxes in society — one that really asked the question: What does the history of taxation look like when it’s seen through the lens of African Americans and their experiences as taxpayers, as recipients of tax dollars?
And I’ll also say that I did not come into this as a tax scholar or a historian. My background was in the history of housing and real estate, looking at urban inequality and race and class within U.S. cities. And particularly the kind of intersections between issues like housing and real estate and education, the sources of funding for public education or other public goods and services. In that sense, all roads led back to property taxes, which are the lifeblood of local governments in America and the source of the bulk of public dollars toward public education among others.
And they’re derived from housing markets, based on those markets, which has been a subject that has gotten a lot of attention from historians who look at the history of race and inequality in America. There’s been a profusion of scholarship on the history of redlining, the history of housing segregation, and federal policies that were shaping and influencing that, as well as the growth of the private real estate industry in the 20th century.
And I’ve been immersed in that scholarship for years. I teach classes on it. I wrote books about real estate and coastal development. But I was really struck at a certain point by how little discussion there was or how little taxes were ever at the center of that analysis. They would maybe be mentioned in passing or maybe just in a brief gesture toward it but never actually put under the microscope. And that was something that I really wanted to do with this book.
Joseph J. Thorndike: All right, I want to tee you up to give us your elevator pitch here on the book, right? But I’m going to frame it in this gimmicky way, which is that we all know that old saw about taxes — that an old tax is a good tax, which seems to me like something a tax administrator wrote one time, which I think it is. Because old taxes are good taxes if you’re just interested in having a tax that collects money and plenty of it.
But let me ask you, judging more broadly. Rooting the tax in everything that you root the tax in, is the property tax, this old tax, actually a good one?
Andrew Kahrl: Well, in theory I would say that the property tax is really the only wealth tax we have in America, in the sense that property encompasses all forms of assets and not just homes and land but also stocks, bonds. But that’s not what it is in practice. The property tax today is essentially a tax on real estate, and more specifically, a tax on housing.
So in a sense, we need to be clear as to what actually we talk about when we’re referring to the property tax. And even still, that can be a progressive tax that, in theory, would take a larger chunk of revenue from those who have more property and have more wealth than those who lack it. But in practice, that’s not the case. In practice, the property tax is regressive. Studies have consistently shown that lower-valued properties are taxed at an effectively higher rate. And that when you get very high up the scale, then you’re seeing real reductions in — the incidence of taxation is one that skews much more towards lower value properties and effectively has a higher burden on poorer Americans.
I think a lot of that, and as I show in my book, I mean one of the things I say at the outset is the most important thing to understand about the local property tax is that it’s a local tax. And so much of where my book proceeds from, and where I really try to get the reader in the frame of mind of thinking about what this meant for African Americans, is thinking about what does it mean when you have this tax that is administered locally. And one in which there’s great discretionary powers vested within these local administrators and very few checks on those local powers. You have virtually no recourse to the federal courts if you are a victim of unfair taxation at the local level. There are very few regulations historically, and still to this day, governing how local tax administrators do their jobs.
And as a result, that has made it very susceptible to manipulation and prone to these inequitable results. We know that there is a long history of racism within real estate and housing in America — that African American neighborhoods, Black property owners, that property is devalued because of race. And that remains the case today. And yet at the same time, we have plenty of work that’s been done that shows that lower-value properties are assessed higher, meaning that the less valuable your home is on the open market, the higher effective tax rate it’s going to be taxed at.
And so you put those two together — the fact that Black neighborhoods are worth less because of race and the properties in those areas are devalued, yet they’re also taxed higher. That alone turns this regressive tax into a functionally racist tax in application. And then you combine it with, again, all these other political factors that shape what ultimately determines who pays what. Where I try to place the focus here is looking at what does this mean, practically speaking, for individuals, for communities, and more broadly for the landscape of inequality in America today?
Joseph J. Thorndike: So what I take from that is that Black Americans have been paying too much consistently, systemically over time. Your book spans 150 years or so. You break it into five periods, which we can talk about, but they’ve been paying too much. That’s not the only problem with the tax, right, as I read it? What else is wrong?
Andrew Kahrl: Where do we begin? I want to make it clear to your listeners here. I’m not coming at this as someone who is anti-tax in the slightest, and I don’t want my arguments here to be in some way misinterpreted as some kind of libertarian call that taxes are theft and all that and the like. In fact, no, I mean I believe strongly that we need to have sources of revenue to fund the vast needs that we have as a society.
The way I look at it is, are those burdens and are those obligations being fairly distributed? And ultimately are they actually addressing or actually worsening the very problems that public spending is aimed to tackle? There’s the two things that really got me into this project that I think are ones that are two big takeaways for readers who maybe aren’t familiar with some of these issues with local tax administration.
One which we just discussed was the fact that, historically and still to this day, African American property owners and neighborhoods — so including again folks who don’t pay property taxes directly but pay that through their rents — are overassessed relative to value. That was the case in the Jim Crow era where my story begins. It remains the case to this day.
So I look at the causes of this. Why do we continue to see these assessments being unfairly administered or structurally unequal in the case of much today? But also the enforcement side, which I really shine a light on the ways in which property tax delinquency — the laws, statutes, and procedures that govern property tax delinquency have opened up this entire set of inequitable practices and downright predatory practices that have been unleashed by these procedures that states follow.
So just to be specific here, in the majority of U.S. states, if you don’t pay your property taxes on time, wherever you live, a lien will be placed on your property. But in the majority of states, and the ones that I really look at in my book, those liens, that unpaid tax bill, are then sold to private investors at what are known as tax lien sales. And those private investors then buy your debt, and from that can then charge you very high interest rates, attach numerous fees onto those, and really again, turn what would maybe start as one, sometimes even a relatively minor tax bill that went unpaid, and can quickly mushroom into a much larger debt that is enriching these investors while invariably really driving down this homeowners and neighborhoods in which this practice takes place.
Joseph J. Thorndike: Those sections of your book that address this tax lien industry as it’s developed over the decades or even centuries, those are, I was going to say engaging, but maybe depressing is the better word.
But certainly the more vivid parts of your story I think are the tragedies of that dispossession that occurs over and over again. I mean, can you give us a sense of what the long-term effects of that have been on say, African American property ownership?
Andrew Kahrl: Yeah, you can only begin to grasp just how significant this has played in undermining African American struggles to acquire and accumulate property, whether it be in the rural South of the turn of the 20th century or in northern cities and the postwar era. That falling into tax delinquency be one of these situations, again, that it particularly affected African Americans, for one because of their own financial precarity. But also as well through the financing arrangements that were available to African Americans, which often did not come with many of the protections that, say, came with a conventional mortgage.
All of these factors combined to make African American homeowners and landowners more prone to falling into tax delinquency. And, as I show in the book, because of the way these laws are structured, it made it more profitable for those who are investing in tax liens to buy them off of African American delinquent taxpayers than whites because it oftentimes took longer for them to pay off these debts. And so the longer it took, the more profits could be generated from those debts.
So all these, again, just these arrangements then in turn put a bullseye in the backs of African American homeowners. And not just exclusively them. I mean, I think, my book focuses and looks at this through the lens of African Americans, but it is not to say that many of these practices were not also affecting white Americans, affecting many different folks. In fact, I hope that one thing my book does is inspires others to look at this in other contexts and within other groups.
But to give you a sense here, one thing we know is that there was a sharp decline in Black land ownership over the 20th century. Really, one of the more remarkable stories of the post-Civil War and post-Reconstruction era was the fact that in spite of not getting any assistance from the federal government and doing so in the face of hostility, and opposition, and treachery at every stage, African Americans accumulated upwards of 16 million acres of land in the 50 years after the Civil War.
Joseph J. Thorndike: That’s a fascinating number. I got to say that if there’s one statistic that jumps out from your book, it’s that one.
Andrew Kahrl: Yeah. I mean, again, this is a remarkable achievement. The lands that African Americans were acquiring were not the rich farmlands of the Black Belt, but they were often small family-owned farms, small acres. In many instances they were not able to support their families with this land, but that land base was an animating force in Black politics, and Black political thought, and struggles for liberation.
Property rights meant a lot to African Americans, especially at a time where their civil rights were being flagrantly denied. 1910 was really the high watermark of Black land ownership in America, which is crazy to think about because that’s also considered the nadir of Black life in America — the low point of race relations and of African Americans’ denial of full rights of citizenship. But yet over the course of the 20th century, that land base eroded and in some instances slowly, but then in other instances rapidly.
And there were many causes of that. But one significant factor were taxes, in a couple of respects. One were the pressure of paying taxes, which were often, again, as mentioned earlier, the land that they own was often overassessed relative to value, so their tax bills were higher than others were paying. And so that would amp up pressure for families who were struggling to make payments to lose that land under duress or to sell it under duress. But also as well, it increased the odds of folks falling behind on their tax payments, falling and having their land sold at a tax sale.
And this was, really by the 1960s and ’70s, was reaching and was recognized as a crisis across the South. And I write about these organizations that stepped in and were sounding the alarm about just this dramatic loss of Black-owned land across the South and were targeting these tax sales as a causal force of land dispossession and really calling attention to this, and also really trying to take direct action to counteract what was a system that had long been abused.
And I should also mention, again, during the Jim Crow era, tax sales were essentially — could be a marketplace in stolen goods as far as African Americans were concerned. I give several examples here of African Americans who had their land stolen out from right under them because their tax bill never arrived in the mail, or it was never recorded. Folks who again were doing everything that they were told to do and thought that they needed to do to hold onto their land and then had it snatched out from under them at tax sales through this ostensibly legal process.
Joseph J. Thorndike: I want to read you a quote from your own book and then ask you a question about it. So you say in your introduction, “From the moment Black people began making claims on the state, whites in power have responded by peddling the canard that Blacks paid little in taxes and by implication were undeserving of the rights, benefits, and protections of citizenship.”
So I was immediately fascinated by this because I’m very interested in notions of fiscal citizenship, which I interpret to mean the collection of rights and responsibilities that tie an individual to the state and the state back to the individual. But it strikes me that your story is about an effort to exclude people from the notion of fiscal citizenship. Am I reading that right?
Andrew Kahrl: Absolutely. And I should also say in that respect, my work really builds on the pioneering scholarship of Camille Walsh. Her book Racial Taxation I’d highly recommend to your listeners. But yeah, absolutely. Key to Jim Crow as a governing system was the erasure of Black people as full citizens, which meant erasing them as taxpayers.
And I lay out here the ways in which the erasure of African Americans as taxpayers became the justification for all manner of exclusions and deprivations that we associate with the era of segregation in America. It wasn’t just the segregation of white and Black schoolchildren. It was the paltry spending that was devoted toward African American public education. It wasn’t just the fact that African Americans couldn’t drink from white water fountains. It was the fact that cities and towns wouldn’t put water mains in Black neighborhoods, wouldn’t extend paved streets into Black neighborhoods.
All these things that tax dollars were being spent on were not being spent on African Americans anywhere closely approximating a equitable manner. And consistently, that was being justified publicly. And whenever challenged on this notion that African Americans don’t pay any taxes, so they should be happy with whatever crumbs fall from the white taxpayers’ plates. I mean that was essentially the fallback whenever these unequal distribution streams were being challenged. Which again, then posed for African Americans, stressing their fiscal citizenship was key to their own Black politics during the Jim Crow era.
So I really show how consistently African Americans are responding to this lie with the truth. They were quite literally producing their receipts to then make claims on the state. One example at the depths of white supremacist violence is the demagoguery that enveloped the South at the turn of the 20th century, you even had politicians — most rabid white supremacist politicians like James Vardaman, who was governor of Mississippi — who were out in the campaign stump saying, “Let’s segregate tax revenues entirely so that Black folks only get the tax dollars that they contribute directly.” And they use this as a way to appeal to white voters by saying, “You don’t have to worry. We’re not going to take any of your tax dollars and spend them on African Americans.”
And Black groups responded to this by saying, “Okay, well let’s see what happens if we did do that.” And actually there was a study that was actually done by a white educator in North Carolina who showed that if you actually did do that, African Americans would be owed money because they were actually subsidizing white education throughout the South significantly, directly. If you actually did look at the per capita tax contributions of African Americans, they were actually heavily subsidizing white schools because of the ways that these tax dollars were being redirected. And at the same time, having their land and property overassessed, which was something that was talked about and an accusation and something that many folks felt but often struggled to actually prove.
But I went in and looked at — in Virginia, like many Southern states, they actually segregated their tax books by racial lines. And you can add up the numbers and see that yeah, an acre of Black-owned land was being systematically overassessed relative to white-owned acres of land.
Joseph J. Thorndike: Yeah. Hey, we didn’t actually talk about your periodization, so maybe we can just briefly touch on that. You cover 150 years, but how do you break that up? How’s the story unfold over time?
Andrew Kahrl: The story really begins in the aftermath of emancipation and during the period of Reconstruction, where ideas about taxpayer citizenship and public spending are very much at the front of the larger politics surrounding Reconstruction — this unfinished struggle to expand the state’s capacities to provide for the general welfare, in particular formerly enslaved African Americans.
So I begin at this point where, one, African Americans are paying taxes directly, many for the first time. And where the fiscal needs of the state are expanding dramatically and in a way that is fiercely contested, one that is also deeply threatening to the white power structure as it exists in the South. So I begin there, look at the overthrow of Reconstruction, and then later the rise of Jim Crow through the lens of tax policy and politics and administration. And then proceed, really, in some respects, maybe a simplistic way to describe it is it follows the journey of African Americans over the course of the 19th and into the 20th century. The first part of the book focuses on the Jim Crow South, the period from the late 19th into the early 20th century.
The second part follows the journey into the urban north, the era of the Great Migration, then shifts focus to looking at northern cities like Chicago, Pittsburgh, Cleveland, New York in the early to mid-20th century. Then from there I kind of switched back in the third part to looking at the Civil Rights Era and looking at it in the South in particular, focusing on the way that struggles over equal access to public goods and services were an animating force in Black freedom movements, especially at the local level.
The title of that third part of the book is “A Local Struggle,” and I make the point that you can’t really understand the Civil Rights Movement as a whole unless you understand the way that people are experiencing racism, and oppression, and deprivation at the local level in the communities where they lived, in the neighborhoods that lacked sidewalks, clean water, paved streets, and the schools that only were open half of the year and closed during harvest season — all this lack of equal access to goods and services.
And also, as well, you can’t understand the ways that white segregationists sought to prop up and maintain white supremacy without looking at the ways that they were using taxes and their taxing powers as a tool of oppression and as a form of intimidation and retaliation. And I was struck as I was doing research on this. The fact that no one had ever really, despite the voluminous scholarship on the Civil Rights Movement, that the issue of the ways in which local governments and state governments across the South during the era of massive resistance were seeking to undermine and intimidate simple rights organizations, individuals, and entire communities through overtaxing their homes and properties, through putting their homes up at tax sales, through removing tax exemptions from churches.
I mean, all these things, they were throwing everything at the wall they could, and the local tax administration was one of these arenas. So I again retell that history through the lens of local taxation and also tell the stories of that first generation of African Americans who were running for and winning local offices as tax assessors.
I think one of the most fascinating chapters to write was when I told that story about the first African American who became a tax assessor in Mississippi state history, and what happened when he came into office, and the ways that him in that position, with a mandate from the Black electorate to make changes, was deeply threatening to the local white power structure and very revealing about the way that power operated in the rural South.
Joseph J. Thorndike: Not to be too blunt about it, but you really discussed the way that tax is weaponized. A tax instrument, which might be in its theoretical state fine, can actually be turned to bad ends and destructive, oppressive ends.
And I think that’s something very important that you bring out in this book, is that as you said in the beginning, a property tax could be a great idea but not in the way that it has actually been practiced in this country.
Andrew Kahrl: Yeah, because throughout much of the time period and much of the context that I’m writing in, there’s such great discretionary powers that local tax administrators could wield that allowed it to become a instrument of political favoritism, of social engineering and control, as a way to reinforce existing hierarchies within society. It can be abused in so many ways because, again, of the lack of accountability. I look at this in the context of northern cities.
In Chicago, for instance, the county tax assessor was at the nucleus of this broad system of political patronage and favoritism. There was a reason why people referred to the Cook County tax assessor as one of the most powerful officials in the entire state of Illinois. And it wasn’t just because he was plugging numbers into a mainframe. It was because of the powers of manipulation that they could wield — the ways in which they could dramatically reduce taxes on certain communities or raise them on others or on certain classes of businesses.
And this was a power that was frequently abused and consistently abused in a way that disadvantaged African Americans. And proceeding further on, so in part four of the book, I look at the era of the tax revolts in the ’70s and the issues that were fueling it, retell that history of the tax revolts by, one, showing that much of the unrest that was fueling anger over the property tax was coming from the left — low-income and minority communities who were being overtaxed and underserved by local governments. And at the same time, we’re seeing how the wealthiest property owners in their communities were paying next to nothing.
And so a lot of the impetus behind what would later become the tax revolts of the ’70s was an effort to get the wealthy to pay their fair share so that schools could be funded, neighborhoods could be well-maintained. And a lot of it was focused on — or at least the public attention was often drawn to — corruption and favoritism within these assessors’ offices. And I look at the ironic story that unfolds as this political moment unfolds.
Joseph J. Thorndike: One of the points that I think you make in the book that I found very interesting is you describe the local tax system as a trap for localities so that you end up with this apparent irony that even in cities with Black political leadership, they aren’t really able to escape that. Can you tell us a little more about that?
Andrew Kahrl: That’s a great question. I think this is — one thing that I really look at in the context of U.S. cities and metropolitan areas is this fragmentation of local governance, the multiplication of all these local municipalities, school districts, tax jurisdictions, and how this is leading to this fragmented landscape where you have, say, places that have relatively large tax bases relative to population that can in turn provide great public services, have well-funded public schools.
And the residents of those communities are actually paying lower relative taxes than those who are living in cities where the tax base is shrinking and the needs are great. And this is the story of cities in the postwar era going up from the 1950s through the 1970s, is you have white flight, the movement of not just middle-class whites families into suburbs, but they’re taking their tax dollars with them. They’re forming their own municipalities, their own school districts. They’re pulling up the drawbridge once they get there through excluding African Americans and the poor from being able to live in these communities through various exclusionary tactics.
So they’re creating these tax havens, and businesses and industries are also migrating out of central cities, or they’re using the threat of doing so to get dramatic reductions in their tax obligations. And the end result is you have — and I really shine a spotlight on some of these really fiscally distressed cities like Gary, Indiana, Chicago, even, and Detroit. These cities that we’re seeing this erosion of their tax base at the same time as the needs are multiplying because their cities’ populations are growing poor and their jobs are disappearing, their revenue is also eroding at the same time.
And so this leads to these perverse outcomes where, yeah, African Americans are winning mayor’s offices, they are gaining political power as they’re becoming majorities in many of these large U.S. cities. But at the same time that they’re winning political power, the city’s fiscal power is being dramatically diminished. And their tools for reversing that are very limited.
That’s the thing, again, that local governments are at the bottom of this. They are the lowest levels of government, and they are very vulnerable to these broader structural changes that are happening at the macroscale. And their ability to respond to that are limited to just oftentimes finding ways to try to rebuild the tax base through trying to attract business and industry or retain existing residents who are seen as helping to prop up housing markets, which, because of how race shapes property values, means that they are very attentive to white homeowners.
And during this time period, I provide several examples of how cities are consciously underassessing white neighborhoods in order to slow the exodus, to try to in some way. And they’re doing so in competition with suburbs, which are also underassessing white residential neighborhoods. So in a sense, they’re kind of in this race to the bottom.
But I’m always turning the lens back onto what this meant for African Americans. The thing to keep in mind here is that whereas white homeowners and businesses have a great degree of mobility during this era, and that means they have a great degree of negotiating power when it comes to their effective tax obligations, African Americans don’t have that mobility.
I title one of my chapters “Captives.” They were captive within these urban housing markets. That was what ghettoization was. They were stuck behind the color line because of all these mechanisms of exclusion and housing markets. And as a result, local tax assessors were under no compulsion to underassess their neighborhoods, which they didn’t.
When I talk about the unequal outcomes that I document throughout the book, I want to make clear to readers is that I’m not implying that all assessors are maniacal, sitting around trying to scheme up ways to overtax Black and brown homeowners. Oftentimes it’s just through inattention. It’s through the accumulation of giving out favors and reductions to everyone else that, at the end of the day, results in these neighborhoods and these classes of taxpayers being then forced to pay more. And so that’s, I think, one takeaway from this.
And again, getting back to your original question, African American mayors and local public officials, you don’t find folks challenging this logic. Or even if they are questioning it, they are very limited in their ability to do anything about it and becoming even more so again as federal funding is decreasing in the 1980s for cities. Really, they’re finding their hands tied in so many different ways that prevents any sustained effort at structural change.
Joseph J. Thorndike: I think that leads us to a good question that we might use to wrap up since you and I could probably go on talking about the book for another hour. What’s the way out of this? I’ve seen other interviews with you in which you have confessed — it’s not really a confession — that you’re trying to write history that’s useful to people trying to understand their world and trying to solve problems today.
So do you have a solution, a way out of this, what really seems like a really artfully constructed trap that is hard to get out of? Is there a solution? And what levers are there that might bring that solution along? It’s got to be dealing with the politics of it.
Andrew Kahrl: It is a tricky situation in the sense that, because my book really shows how these are all building on each other and reinforcing, that there’s no one simple, one single solution to this. But one way I think about it is you have these immediate actions that can be taken to protect — if you read my book and really zero in on the victims of this and those who are most victimized by the current state of affairs, there are things that can be done to protect those who are most vulnerable.
One easy approach that, again, we see in some locales, although we need to see much more of it, are things like circuit breakers where essentially your taxes cannot go above a certain level of your income. And once they do, then they stop. And so that can protect a lot of the victims I write about of who are having their homes stolen from them through tax sales, who are forced to sell their homes under duress as neighborhoods are gentrifying and taxes are increasing beyond their capacity to pay because they’re on fixed income. Circuit breakers that are set at a rate that would protect those who are most vulnerable can be an effective solution. And the one again, that are targeted toward those, again, who are most endangered as a result of this.
Similarly, I think again, forcing local governments to take out of tax sales owner-occupied homes in which the individuals who are delinquent because of financial distress. The problem with these tax sales, and again, much of the property that are put up for tax sales are vacant and abandoned properties, properties that owners had walked away from or who are not paying their property taxes intentionally. Those folks need to be dealt with.
Again, this is not an argument for getting rid of tax sales or any enforcement mechanisms because then a lot of folks who are bad actors would be able to really ride the coattails of what would be a cause of protecting those most vulnerable. But we do, the way it’s often run now, the way it’s administered is that these two groups of people are thrown into the same bucket and they’re treated in the same way. And in fact, actually, owner-occupied homes are much more likely to be bought up at tax sales and the target of some of these predatory practices than vacant and abandoned properties. So the system actually, currently as practiced, works in the exact opposite manner of the way it should.
So again, one thing you can do in an immediate way — and we’ve seen this in cities where they’ve mobilized around, say, forcing the city to no longer sell this type of property or maybe raising the bar as to what the amount has to be before it’s put up for a tax sale. But more broadly speaking, again, I think where we need to go long term is, one, be guided by the principle that taxes should be structured and administered in a way that are amply funding the needs that we have as a society but are doing so in a way in which the burden is being placed on those most capable of paying and relief is being provided to those least capable and those who are most in need of relief.
And so, one thing that I come back to at the end of the book is one way to make the property tax less inequitable and address some of the abuses that my history details is to make it less important. And what I mean by that is right now, again, you look at many cities. Their dependence on local property taxes is so great, and their fiscal fates are so tied to this source of revenue that it leads them into all these instances where they are putting their thumb on the scale for certain types of properties and certain types of property owners. They’re again engaged in forms of real estate development that can often have really negative consequences for low-income neighborhoods and vulnerable populations. They are so squarely focused on ways to increase the local tax base through real estate development and driving up property values that these other downstream consequences are pushed to the side.
And similarly, if we look at, say, the way that we fund public education in America, finding a way to diminish the local schools districts’ dependence on local property taxes and instead funding them at the federal level is a way to also address not just these gross imbalances in the per-pupil spending in schools. There are just shocking disparities in the amount of funding that a child living in poorer communities will receive than wealthier ones. That’s a problem that no individual locality alone can solve. It requires action at the national level. It requires tapping into the collective wealth we have as a nation as opposed to having it devolve down to these local units of government whose lines are drawn in ways to lock in wealth in certain places and to lock out others.
But I say that in the context of where we’re at right now, where we are seeing a federal government that is running in the exact opposite direction and abusing its own fiscal powers in very disturbing ways. I think this is an argument I make in terms of thinking about where we want to head as opposed to where we can actually realistically be today.
And I think maybe as a historian, I’m playing the long game here. I’m not in any way thinking of calling for a set of policy actions today, but maybe just getting us to think about what this structure does, and where it leads us, and what ways we might want to think about building a new one.
Joseph J. Thorndike: Well, that seems completely reasonable to me because as you say you may be thinking the long game. But politics is a really short game, too. There can be big swings very quickly.
Andrew Kahrl: And I think also, another thing that I hope this book will do, is it will make us much more attentive to the powers that these local offices have. One thing that I talk about in one of the last chapters of the book is in Chicago in 2017 after it was revealed that the county assessor was still, after numerous scandals, was still overassessing Black and brown neighborhoods. And it just so happened to be an election year.
And really for the first time in anyone’s memory, folks poured out and voted in this assessor’s election and kicked out the incumbent, a person who was well ensconced within the Democratic Party machine and elected a reformer. Many readers will pick up this book and not be aware of the fact that in most parts of the country, tax assessors are elected officials. We vote for these folks in many instances, or they’re appointed by people who we vote for. In most places, these offices, they run unopposed.
I think most people would struggle to name who their tax assessor is. We need to pay attention to local government because I think if there’s anything that we take away from this book, it’s there’s a lot of power being wielded in these very obscure, lower level, the channels of government that we would be wise to pay closer attention to.
Joseph J. Thorndike: And I think that’s a great way for us to end. Politics matters, especially at the local level, and it matters for individual voters. And in very specific financial terms, it matters, as you demonstrate in the book. So hey, I just want to thank you. This has been an awesome conversation. As I said, I love this book. I can’t recommend it highly enough. Thank you for being with us today.
Andrew Kahrl: Well, this was really fun talking with you, and I really appreciate you having me on. So thanks so much.
Read the full article here
