Property Tax and Justice, Part Two

So: property taxes go up too much, thanks to a great real estate market, and incomes only increase by moderate amounts--what really is the source of the injustice at hand? Is it that taxes go up precisely because of non-liquid wealth (again, you can't "cash in" your house at the bank and have money to pay your bills), and precisely on people who don't have the liquid wealth to pay them (incomes only go up moderately)?

If this is the problem, then there's one obvious solution, but one that would be remarkably hard to implement, politically speaking: don't tax property to pay for schools. Tax income instead. This makes very obvious sense when you think about the especially burdensome nature of property tax on people who are living on fixed incomes, e.g., seniors living on pensions/social security benefits. Property taxes tax many people who don't have the wherewithal to pay those taxes. Why not tax the people who have the money to pay tax, i.e., the people with higher incomes? In other words, if the taxing authority expects "liquid" payment of your property tax bill, why not tax "liquid" wealth: income?

To me it makes a world of sense. Here are (some of) the political difficulties, though, to paying for education with income tax: it's usually states and the feds who collect income tax; it's rare that municipalities and counties (or school districts) do. If the state were to levy an income tax to pay for educating Missouri's students, how would we distribute that money to our school districts? Many people would rebel at the idea that it should be distributed equally, or even according to the needs of the students. Let me be totally blunt here: people who live in affluent districts are used to having the best schools, with beautiful facilities and all the wonderful extras. If the state provided equal, or need-based funding for education from income tax, how would these districts be able to single themselves out as the best? They wouldn't . So very few of the voters from these districts would go for such a scheme.

So what can policymakers do, if income tax isn't an option, to tax in such a way that those without the ability to pay aren't taxed at too high a rate--or more exactly, aren't driven from their homes by their inability to pay their increasing property tax bill?

I'll have to write more in part three, later.