In my many years as a journalist, I spent a lot of time exploring how governments spend money: who and what gets prioritized; which kinds of groups must jump through hoops for a few dollars v. those who could expect a blank check; and how, when times were tough, it seemed that services for people with the fewest resources were cut first.
I focused less on the money coming into local budgets – how governments raise money.
Andrew Kahrl, a professor of history and African American studies at the University of Virginia, has spent a lot of time looking at both sides of the ledger. He’s interested in tax laws and policies, but more importantly, how they are administered and enforced.
While researching his first book, Kahrl began seeing example after example of African Americans losing their land and homes unfairly – deliberately – because of over-assessments by local tax officials. That book became “The Land Was Ours: How Black Beaches Became White Wealth in the Coastal South.”
Kahrl continued that research which led to his latest book, “The Black Tax: 150 Years of Theft, Exploitation, and Dispossession in America.” It details how local tax officials, who have a great deal of autonomy, have undervalued but over-assessed properties owned by Black people, who, despite paying disproportionately higher taxes than white people, receive fewer and less adequate public services.
I asked Kahrl about his book; he answered by email from his home in Virginia.
Q: How are property taxes different from, say, income or sales taxes, and what makes them so important?
A: Unlike the sales tax, which is collected when someone makes a purchase, or an income tax, which is collected when someone earns money, it is entirely possible for someone to own property but be unable to pay the tax on it. The value of any home or piece of land can only be realized upon sale. Until then, a property owner must utilize other resources to pay their taxes. And when they cannot, or refuse to do so, the government can seize their property to satisfy the debt.
Property taxes are important because they are the main source of revenue for local governments and school districts in America, and thus fund critical needs, like public education and public safety, pay the salaries of local officials, and pay down the bonds that cities and towns float to fund major projects.
Q: I understand you cringed a little when you saw the headline for the NY Times piece, “It’s Time to End the Quiet Cruelty of Property Taxes.” Why was it off the mark?
A: Headlines are meant to grab readers’ attention and get them to read the article. So, in that respect, it was an effective headline. But what drew eyeballs to the piece also led to misinterpretation of my argument. Many readers assumed that I was arguing that property taxes are inherently cruel and should thus be abolished, when in fact instead, the piece argues that certain aspects of the tax’s structure and administration (its local nature, and the discretionary powers tax assessors enjoy) have consistently produced unfair and unjust outcomes.
I make clear in the piece that I think there is nothing inherently bad about taxing property. Indeed, we should be taxing the nation’s wealth. But when we place this responsibility in the hands of local officials, and when we make the funding of critical public needs based on a given locality’s total wealth in property, the result is assessment disparities favoring the wealthy and politically influential, and vast differences in the size of local tax bases, ensuring that some places will be flush with resources while others will be starved of revenue.
That is what is cruel and unjust about the property tax as it currently exists, and what we need to end.
Q: You cite many heartbreaking and outraging examples of how Black people were robbed of their homes and land, sometimes for fraud and corruption, but more often because of systemic practices that made such outcomes nearly inevitable. In what ways have these systems changed since Jim Crow?
A: What is most chilling for many readers of my book is the realization that the laws and general procedures of property assessments and tax sales have changed little since the Jim Crow era, when, in many rural counties in the South, they functioned as essentially a public marketplace for stolen goods. Moreover, the circumstances that led many Black property owners to fall behind on their taxes and lose their land and homes at tax sales in the past remain an ongoing problem today in areas (both rural and urban) experiencing rising demand and intensive development. Taxes soar. Families on low or fixed incomes struggle to meet expenses. Some invariably are unable to and miss a payment. And when they do, tax lien investors are ready to pounce.
The main difference today is that, in places like Beaufort County, S.C. (profiled in my book), those who crowd into county tax auctions looking to score valuable real estate for pennies on the dollar, or amass obscene profits from interest and fees collected from families desperate to hold onto their homes, are not local speculators and land grabbers. They are representatives from hedge funds and Wall Street institutional investors.
Q: You also cite, for example, the story of Gary, Indiana, and the role tax breaks given to powerful companies have also impacted communities. What have you found as dig into tax breaks and the ways they’re distributed?
A: This is a problem that we are all familiar with: large corporations, major employers, sports teams and the like invoking their “exit option” to secure massive tax breaks and public subsidies from local governments. The circumstances and political interests at play varied, but no matter the place, the beneficiaries were always those who could wield leverage over a city or county. This comes as no surprise.
But we have paid less attention to the downstream effects of these tax cuts and handouts on the funding and distribution of local public goods and services. That’s what my book does through the histories of cities like Gary: draw a direct line from the massive tax breaks local officials awarded to U.S. Steel through absurdly low assessments to the severely underfunded schools, closed parks and playgrounds, crumbling local infrastructure, and deteriorating quality of life for the people who lived there.
Q: One way you identify to help address the inequities caused by our current systems of property tax collection is by having the federal government give more money to communities, which currently are often so dependent on local taxes. Can you expand on this and perhaps other, related solutions?
A: The United States stands alone among federated nations in lacking any permanent measures for reducing fiscal inequalities between lower units of government. The absence of any such system in the U.S. lies at the heart of many problems discussed throughout my book: the clustering of middle- and upper-class families together in fiscally advantaged localities and school districts and the exclusionary politics that characterize these places; the fiscal disadvantages that poor and heavily minority localities suffer; and the corporate tax breaks, austerity policies, privatization strategies, and harvesting of revenue from the poor (which includes over-assessing properties in low-income and minority neighborhoods) that fiscally disadvantaged cities pursue in response.
Creating a system for ensuring that local governments and schools in the U.S. have the resources they need is thus not only an urgent necessity; it should also be treated as an opportunity to adopt structural reforms aimed at addressing the particular features of our current system that fuel the litany of racial inequities, injustices, and abuses recounted in my book.
In general, I think we need to do more to shift the site of revenue collection to the federal level and generate the bulk of the revenue we need to address the numerous and urgent problems we face by taxing the wealth of the nation’s 1%.
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