War is hell!  This often repeated statement is thought to have originated in a speech given by General Sherman during the Civil War.  War IS hell, but is it also a time to ponder enacting a Federal property tax?  Well it was in at least two instances.

In 1798 we had an “Undeclared War with France” after they captured hundreds of US merchant vessels.  In an effort to fund the “war” Congress passed a national property tax.  Property was divided into three categories:  houses over $100, land and houses under $100, and slaves.  Assessors in each of the 16 states were authorized to carry out the property tax.  Values were established, taxes were collected and the war ended in 1800 (yes, contrary to what you might think we are no longer at war with France).

In 1943, three economists, commissioned by the Treasury Committee on Intergovernmental Fiscal Relations, wrote a proposal to modernize property taxation.  They recommended dozens of reforms to centralize and standardize property assessment at a Federal level.

World War II had changed people’s opinions on taxation.  People, in general, were motivated to contribute to the war effort at all levels.  The Revenue Act of 1942 forced most workers to pay income tax for the first time and still opinion polls consistently showed 85-90% of people thought the new taxes were fair.  Property taxes weren’t quite as popular, though, because they didn’t go directly to the war effort.  This, coupled with overwhelming disagreements in Congress, killed the idea of a Federal property tax.  War is not the best solution.  A Federal property tax probably isn’t either.

When you think of Abraham Lincoln, do you think first about him being the 16^th U.S. president and leading the country during our civil war?  Or is it the emancipation proclamation and freeing the slaves that comes to your mind?  Perhaps what you remember most from history class is his assassination while attending the theatre.  Whatever your associations, I bet your first thoughts did not include, “Wasn’t he a property tax attorney?”

It’s true that Lincoln is remembered for many momentous points in American history.  However, before his presidency he was a practicing Illinois attorney.  Abraham Lincoln became a lawyer in 1833 and joined a general practice, taking on all kinds of cases including property tax appeals.  In many of these property tax appeals he was defending the railroads. 

Lincoln was successful as a lawyer, representing clients against the government.  However, as we all know, he became even more successful by winning the election as President of the United States.  When he became President, his fight against taxes continued.  In office he passed two important laws allowing tax breaks for the railroads.  So I guess in the end, you can stick it to the man or become the man.

There seems to be some debate over which NFL team is “America’s Team”.  Both Dallas Cowboy fans and Green Bay Packer fans would lay claim to be fans of “America’s Team”.  I was pondering this while watching the game last Sunday – which, by the way was fantastic.  Why would a team with only 5 world championships (Dallas) even be in the running with a team with 12 world championships (Green Bay)?  The Packers were winning “Superbowls” even before they existed in that form (not to mention the first two actual Superbowls).  And…. who doesn’t like cheese?  Now you might be thinking I am emboldened by the fact that the Packers won last weekend, stunning the red hot Cowboys….. and you would probably be right.

When it comes to taxes in America, I think we could all agree that most of our taxes reflect taxes that we see in other countries. We would probably also agree that we have way too many taxes but I’ll save that for another blog.  Income taxes are common in other parts of the world.  We have sales taxes, others have VAT taxes.  Even with property taxes, many countries have real estate taxes in one form or another.  Yet, if I had to say which tax is “America’s Tax”, it would have to be personal property tax.  I don’t proclaim to be an expert in the taxation policies of every foreign country, but personal property tax is unique to America, almost $100 billion a year-unique.  Annually, thirty-nine states tax personal property and nine tax inventory.  Understanding “America’s Tax” is important if you are doing business in one of those states.  It is particularly important if you are in one of the nine that includes inventory. 

Personal property taxes would be common to both Packer and Cowboy fans, as both states tax personal property.  While we may never agree on “America’s Team” we might actually have a chance in agreeing on “America’s Tax”.  And, by the way, I respect the Cowboy fans who disagree with me on “America’s Team” (as misguided as they may be).