The History of Property Taxation

The property tax, with its ancient origins, was imposed in several different forms of property taxation throughout Europe even before the settlement of the Americas. There were five types of taxes common in the British Colonies of North America. Examples of the taxes levied included property taxes, levied as specific taxes at fixed rates rather than based on a value; the poll or head tax, a flat rate tax usually levied on all adult males and often on slaves of either gender; the faculty tax levied on a person’s earning capacity who practiced certain trades or had certain skills – they were not imposed based on earned income but rather an estimated earned ability. Additionally, there were excised taxes imposed on the items of consumption goods and taxes levied on imports and exports from a colony.

Taxation in colonial America was inconsistent from colony to colony and often unfair. Changes in political power frequently lead to changes in the tax system which favored large land owner with greater political power over small land owners who were politically weak. The approach of the Revolutionary War began an increase in taxation to finance the war. The war and uncertainty of their political futures lead legislators to borrow heavily. Public concern manifested into state constitutions that provided for a property based system of taxation.

A uniformed system of taxation based on property ownership including real property and some tangible property was established at the beginning of the eighteenth hundreds. While tangible property can be movable, real estate, land and buildings affixed to the land, are immobile and can be identified by ownership that is recorded in land records. Today, excise or automobile taxation is also an ad valorem tax based on the value of the automobile. Property taxation has come to be relied upon as the primary source of revenues of state and local governments. Tax policy can be used to impact the burden or benefit of a tax. *

* Joseph K. Eckert, Property Appraisal and Assessment Administration (U.S.: International – Association of Assessing Officers, 1990), 3-15.