Simple Question: Why are property taxes public but income taxes aren’t?

In the US, property taxes are public record. Income taxes are not. It’s viewed as an intrusive violation of one’s right to privacy to view a person’s 1040 without good cause but everybody can go over the property taxes without justification. After a bit of research there doesn’t seem to be a lot of discussion why that is. It’s like there’s deep consensus that this is the way that things should be but no justification laid out in living memory to keep things this way. I agree with the consensus, that property tax records should be public. I just don’t like the thought that I don’t know why and I don’t know why income taxes are categorically different.

11 thoughts on “Simple Question: Why are property taxes public but income taxes aren’t?”

  1. I take it that wills are public in the US, or does it vary by state? Do the states have land registries so that you can look up who owns what? (It saves a great amount of hassle when deeds get lost.)

  2. Property taxes have been around for centuries, and were always a matter of public record.

    Income taxes are a comparatively recent development, and they were imposed on a community that had a long history of legal protection of their personal business as demonstrated, inter alia, by the Fourth Amendment right to be “secure in their persons, houses, papers, and effects”.

    The answer, in short, is custom and practice, not logic.

  3. It would seem that under the Obama Administration, an individual’s income tax is a matter of public record … if you are a Republican or a Tea Partier, that is.

  4. Just a thought, but how can you know if your property is being taxed similarly to similar properties unless you can look at the comps?

    That’s logic, but may not have any relation to the history of why this is so.

  5. The property tax is on property, not on persons. If you don’t want your property tax to be connected to you, you can title the property in the name of a nominee or trustee. Income tax is on individual persons, and nominees cannot be used.

    “I take it that wills are public in the US, or does it vary by state?”

    Wills are public, but trusts are not. Public wills seldom say much. People with lkots of property to transfer at death usually use trusts and other non public records.

    “Do the states have land registries so that you can look up who owns what?”

    Yes, but as I said, you can register land in the name of a nominee or trust.

    Basically, If you have enough to the point you are worried about publicity, you will have a lawyer, and he will know what to do to protect your privacy.

  6. JeffC – It starts getting less obvious when there is such a thing as personal property taxes. If I use my computer to make money, for instance, the state of Indiana says I need to declare that. The software I might use to make that money is not taxable, however. Not all states have personal property tax and I’m not that sure how public those taxes are either.

  7. My sister in Chicago got a notice a few years ago that her home was being sold in a tax sale for failure to pay property taxes. Since she had been paying them regularly, she spent some time going over the property records and found she had been getting the tax bill for the house next door. I never did learn why the county never wondered why they were getting double payment for one house or did the neighbor figure out that somebody else was paying her taxes?

  8. Traditionally, most American laws as well as extra-legal social norms were enforced by local amateur community coercion, either through private channels or by a wink-wink-nudge-nudge suborning of local government institutions like the militia/posse comitatus. This broke down after World War I under direct assault by Progressives in favor of centralized, credentialed functionaries and indirect assault by increasing urbanization and automobile fueled mobility. Much of its slack was outsourced by the public to government, a trend that has continued to this day.

    Traditional colonial/state levies on property drew on this. Posting assessments publicly were a check on both the assessor and the property owner. The property owner could see, and possibly challenge, the value of his property by the assessor. His neighbors could see, and possibly challenge, the value of his property by the assessor. His neighbors could also see if their property valuation was higher or lower than their own, meaning they could challenge their assessments based on reference to his property. The first U.S. direct tax on property, passed in Bastille Day 1798 to pay for the Quasi-War in France, drew on this same tradition to get its levies collected.

    The direct tax collected by the Madison Adminstration from 1813-1817 to finance the War of 1812 also posted public assessments. If that war hadn’t ended, Treasury Secretary Dallas was proposing to levy income and inheritance taxes in 1815. They were defeated along with Napoleon at Waterloo. Great Power war is the primary driver of taxation in American history.

    The excise on income passed during the War of the Rebellion in 1862 and 1864 actually required that assessments be posted publicly. The current income tax regime does not.

  9. I’ll conjecture that it’s a matter of land being in “plain view.” Anyone can see it, make a more or less decent guess at to its value, and thus a more or less decent guess at to what the property tax on it ought to be according to the tax law. Revealing income tax, OTOH, involves revealing a lot of personal details that aren’t in plain view.

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