In the 18th century, real property was probably the best measure available of a person’s ability to pay taxes. That’s because it generated income from farming or things like water mills, ship yards and stores. Only the very rich had residences on town lots.
But in today’s suburban world, property is a terrible measure of a family’s ability to pay taxes. Almost all privately-owned property today is income-absorbing. And it’s also grossly unfair.
The result is that the middle class family pays a much higher proportion of its annual income in local taxes than does the zillionaire across town.
Also, property taxes are highly visible as they arrive in the mail at least twice yearly. Visibility alone is a good thing when it comes to tax because it allows those who pay it to be more aware of it, but in this case is outweighed by the fact that we’re also being reminded of how arbitrary the tax can seem most of the time.
Another negative is that property tax is unrelated to behaviour, as it depends most often on macro factors outside the taxpayer’s control.