Secure Ownership by Ending Property Taxes
Montana provides an example for how states can protect ownership annd improve affordability.
Hello friends,
Across America, taxpayers are asking a question politicians would rather avoid:
Do you really own your home if the government can tax it forever and take it if you cannot pay?
That is the issue at the heart of the new property tax report I co-authored with Joseph Johns of JDJ Insight Partners, formerly of Tax Foundation.
We use Montana as a case study, but the framework applies far beyond one state. Property taxes are frustrating families in Florida, Iowa, Kansas, Montana, Nebraska, North Dakota, Pennsylvania, South Carolina, Texas, Wyoming, and many others because people are tired of rising tax bills, rising housing costs, and local governments that keep growing faster than taxpayers can afford.
Check out:
Download the full report
See Joseph’s publication announcement
Explore the Montana estimator for reform comparisons.
This builds on my earlier policy guide, which lays out why property taxes are uniquely harmful and how states can move from temporary relief to durable reform.
This is not just a tax issue.
It is about ownership, affordability, economic freedom, and whether government should be forced to live within the average taxpayer’s ability to pay for it.
Ownership Should Mean Ownership
Property taxes are different from other taxes.
Income taxes punish work, saving, investment, and success. Sales taxes, when broad-based and applied to final goods and services, are more visible and less harmful than taxes on income, capital, or property. But property taxes are uniquely damaging because they apply to ownership itself.
You can pay off your mortgage. You can maintain your home. You can live responsibly for decades. But if the tax bill never stops, and government can eventually take your home if you cannot pay, then ownership is conditional.
That is why I have long argued through my property tax research and a recent podcast episode on whether you really own your home as property taxes make homeowners permanent renters from the government. That sounds harsh, but it is true.
And this does not stop with homeowners. Renters pay through higher rents. Businesses pay through higher costs. Workers pay through lower wages and fewer opportunities. Property taxes punish improvements, discourage mobility, distort housing markets, and raise costs across the economy.
In a time when affordability is already one of the biggest issues in America, property taxes make it harder to buy, rent, build, invest, and stay rooted in a community.
Relief Is Not Reform
This is where many policymakers get trapped.
Homestead exemptions, appraisal caps, rebates, and temporary compression may reduce some bills in the short run. But too often they shift burdens, narrow the tax base, complicate the system, and leave the spending machine untouched.
That is why I am skeptical of carveout-heavy tax policy. It creates winners and losers. Renters, businesses, future buyers, and people outside the favored category often pay more. Politicians get to say they “cut taxes,” while government keeps spending more.
That is not reform.
That is pressure relief for a system still designed to grow.
The real question is not whether government can make a property tax bill look slightly less painful this year. The real question is why government needs so much money in the first place.
Property taxes rise because spending rises. Appraisals matter. Rates matter. School finance formulas matter. But the root problem is spending. If state and local governments keep growing faster than taxpayers’ ability to pay, tax bills will keep rising under one label or another.
That is why tax reform without spending restraint is a mirage.
Why Montana Matters
Montana is not just an example. It is a serious test case.
Unlike most states, Montana has no broad statewide sales tax. The ATR Sustainable Budget Project reports Montana’s state-local sales tax rate at 0.0 percent, while its top individual income tax rate is 5.7 percent, its corporate income tax rate is 6.8 percent, and property taxes paid as a share of owner-occupied housing value are about 0.8 percent.
Montana also ranks 6th in the Tax Foundation’s overall State Tax Competitiveness Index. That means Montana has real strengths, but its property tax burden is still becoming a major political and economic issue.
That combination creates an opportunity.
Montana can think differently because it does not already have a broad statewide sales tax layered on top of everything else. A constitutionally limited, broad, flat, low-rate sales tax on final goods and services could be one option to help reduce or eliminate major property tax burdens.
But the word “limited” matters. A sales tax that simply funds more government is not reform. It must be paired with strict spending restraint, permanent property tax reduction, and strong taxpayer protections.
The spending data show why.
From 2016 to 2025, Montana’s state funds and all funds budgets both grew faster than population growth plus inflation. My work at Americans for Tax Reform estimates Montana’s 2025 state funds budget was $649 million higher than it would have been under a sustainable budget limit, and cumulative state funds overspending reached $3.0 billion over the decade. On an all funds basis, the 2025 budget was $1.7 billion above the sustainable path, with $13.8 billion in cumulative overspending from 2016 to 2025.
That is the case study in one sentence: Montana does not have a revenue shortage; it has a spending problem.
If spending had been restrained, much more fiscal space would exist for lasting tax relief. That is why the Montana estimator is useful. It helps move the debate from slogans to tradeoffs by allowing people to see how current burdens, partial reform, broader reform, possible sales-tax offsets, and net savings may affect households and businesses.
Montana matters because it shows the broader lesson for every state: mechanics differ, but principles do not.
Control spending. Lower rates permanently. Avoid gimmicks. Protect taxpayers. Secure ownership.
The Best Paths Forward
There is no one-size-fits-all model because every state has a different constitution, economy, tax system, school finance structure, and local government setup.
But two options deserve serious attention.
One is surplus-driven rate compression. That means limiting spending growth, using surplus revenue to lower property tax rates, and repeating that process over time. The goal is not another temporary check. The goal is permanently lower rates that keep moving toward zero.
Another is structural tax reform, especially moving away from taxes on ownership and toward flat, broad, low-rate sales taxes on final goods and services. A well-designed final sales tax is more transparent and less destructive than taxing homes, income, or capital. But it must not become a blank check for government. The goal should be a broader base, lower rates, fewer carveouts, and smaller government.
School finance reform is also central. In many states, school property taxes are the largest part of the property tax burden. Since states already control much of education finance through formulas, mandates, and funding rules, lawmakers should look closely at reducing school property taxes first while protecting taxpayers and expanding education freedom.
Texas shows this opportunity from another angle. In my work on property tax elimination, I have argued that states can start with school district maintenance and operations taxes, use spending restraint, apply surplus compression, and consider broader sales tax bases without pretending government must keep growing forever. Earlier research on replacing property taxes with sales taxes also found potential economic gains when paired with strict spending limits.
The point is not to shift the burden from one taxpayer to another.
The point is to reduce the overall burden and secure true ownership.
Answering the Critics
Critics will say eliminating property taxes is unrealistic.
I disagree. What is unrealistic is expecting taxpayers to accept unlimited government claims on their homes forever.
Critics will say property taxes are stable.
Stable for whom? They may be stable for government, but they are not stable for retirees, young families, renters, small businesses, or workers whose incomes do not rise with assessments and spending decisions. A tax should not be praised because it is easy for government to collect and hard for taxpayers to escape.
Critics will say local governments need the money.
Core services matter. Police, fire, courts, infrastructure, and education matter. But “need” cannot mean every agency, district, and local government gets to grow faster than taxpayers can afford. Local control should not mean unchecked local extraction.
Critics will say sales taxes are regressive.
That concern deserves to be heard, but it misses the broader point if property taxes are ignored. Renters already pay property taxes through rent. Lower-income homeowners can be squeezed out of their homes. Businesses pass property taxes through prices and wages. A broad, low-rate final sales tax paired with property tax elimination, spending restraint, and fewer carveouts can be more transparent and less damaging than a hidden, perpetual tax on ownership.
Critics will say exemptions are easier.
They are. That is the problem. Easy relief is often weak reform. The goal should be equal treatment, lower rates, and a smaller burden for everyone, not a political carveout for some.
The Right Standard
Every property tax proposal should face a simple test.
Does it reduce the size and cost of government, or merely change who pays?
Does it lower rates permanently, or provide temporary relief?
Does it treat taxpayers equally, or create favored groups?
Does it protect homeowners, renters, and businesses, or shift burdens among them?
Does it move us toward true ownership, or preserve government’s annual claim on property?
That is the standard.
Three Takeaways for Policymakers
1. Property taxes undermine true ownership.
A family should not have to make annual payments forever to keep what it already bought and paid for.
2. Spending restraint is non-negotiable.
State and local governments must limit spending growth to no more than population growth plus inflation, preferably less, or property tax relief will not last.
3. Use structural reform, not gimmicks.
Surplus-driven rate compression and flat, broad, low-rate sales taxes on final goods and services are top options, but both must be paired with spending limits, school finance reform, and strong taxpayer protections.
The Bottom Line
Property tax elimination is not radical.
It is the logical next step for states that care about ownership, affordability, economic freedom, and limited government.
Families should not rent their homes from the government forever. Renters should not face higher housing costs because local governments refuse to restrain spending. Businesses should not be punished for investing in property and expansion. And taxpayers should not be told government must always grow while their own budgets keep getting tighter.
The North Star is clear: restrain spending, lower rates, broaden bases, avoid carveouts, protect taxpayers, and secure ownership.
That is how states can reduce property taxes.
That is how states can eliminate property taxes.
That is how states can let people prosper.
Thank you for reading and for sharing my work. If this added value, please send it to a policymaker, staffer, local official, homeowner, renter, business owner, or journalist who needs to think seriously about property tax reform.
Through Ginn Economic Consulting, I’m glad to work with policymakers, organizations, and media outlets across the country on property tax elimination, spending restraint, tax reform, and pro-growth policies that let people prosper.
Read more about the new framework here, download the report here, explore the Montana estimator here, and find more of my work at vanceginn.com or vanceginn.substack.com.
Let people prosper,
Vance Ginn, Ph.D.
President, Ginn Economic Consulting