Sam's Hole In One-And-A-Half

My esteemed colleague Sam Karnick comes oh-so close to the central point about assessments and property tax liabilities in his recent post, although it must be said at the outset that the arguments that he does muster are utterly correct. But in terms of standard public finance principles, the real argument is that government has specific functions to achieve, and is supposed to conduct them "efficiently," that is, at minimum cost. (Please stop giggling.) Accordingly: Rising assessments should be accompanied by falling property tax rates, so that only the needed revenues are raised. Sam hints at this with his "because they can" point---which is clearly correct, in that governments exercise their monopoly powers as well as anyone---but the larger point is that government is not entitled to some share of rising wealth, or more crudely, to have its thumb in every pie. As for the economic burden (or "incidence") of property taxes, that is a story for another day; suffice it for now to say that the homeowners sending the checks to the government do not necessarily bear the (full) incidence of the tax. Off to Berlin Saturday to talk about the Chinese economy. Bratwurst and beer, and oh happy me.