Improperty Taxes

In my city councilman's winter newsletter, I learned something that makes me pleased as punch to be a private propertyowner: between 1997 and 2004, the share of all Minneapolis property taxes borne by commercial/industrial properties declined from 56% to 35%, while the share borne by residential properties rose symmetrically from 32% to 53%. Where's my tax relief now, Mr. President?

Though the newsletter does mention the Minnesota legislature's 2002 decision to cut commercial/industrial taxes by 40%, it oddly does not comment on the effect of declining federal funding for cities, which is a direct cause of rising property taxes. And - since political-economic theorizing isn't really appropriate for a neighborhood newsletter - the piece also doesn't argue that this reversal of the tax burden is deeply unfair. The individuals and families who own most residential housing have a far more difficult time meeting rising tax levies by decreasing costs and increasing revenues than businesses do. After all, doesn't the capitalist marketplace - as shaped by institutions such as property-tax regimes - function to sort the efficient firms from the inefficient ones, rewarding the former with profits and driving the latter out? I guess not. It appears, rather, that residential property is the bottomless well from which cities can draw the revenues they don't get from the state or the feds, while businesses are allowed to avoid bearing their fair share. I suppose that, ultimately, it doesn't matter if I pay federal income taxes which are then distributed to my or local property taxes to the city itself. Still, this shift from taxing investors to taxing earners is rankling.