What a great topic! I have long considered property taxes bad. They are a tax that just keeps taxing! Not only that, but in most places, it is possible to drive some one off property they have owned for many decades when property values increase. Renters have to move to other places in the city because property taxes go up, and thus landlord must raise rents. This feeds the gentrification loop.
I wonder if any of you landlords on here don't consider your property taxes when you figure your expenses? Sure, you probably set your rents at the rate you think the market will bear- but what about raising them on current tenets? When you decide whether or not to make an investment based on its potential profit? One way or another, your tenets end up having increased property taxes passed on to them in the form of increased rents. Even though the bill may come in your name, and you may be responsible to make sure it is paid.
On the other hand, I have had a hard time coming up with an alternative way to fund schools and fire departments and other things Zachary Dosch pointed out. But the more I have studied public education, the more I realize that the thing they need last is more money. What they really need is less bureaucracy. In order to make that happen, we need a complete overhaul of the system. I have some thoughts on that, but that is not the topic, so I won't go into it here.
Thomas Jefferson knew that consumption was the best for of taxation- (see http://duckduckgo.com/?q=thomas+jefferson+consumption+tax). In Jefferson's day, taxing imports was the perfect solution- the wealthier you were, the more you imported, and thus taxing imports taxed the consumption of luxuries. In our day, this is not true- the least expensive goods are often imported, and thus taxing imports would place a heavy burden upon the poorest in society.
So what do we do now? The best proposal I have seen is the Fair Tax. It is a consumption tax, but everyone receives a pre-bate on the tax up to the federal poverty level. As Brian Hoyt pointed out, without a pre-bate, sales/consumption tax are extremely regressive.
One criticism of it is that it shifts the burden to the middle class, because the poor pay no or very little tax (The very poor would actual come out ahead). The wealthier people are, the less of their income is spent on consumption Actually- this is a good thing- the wealthy don't spend all of their income, so they invest it back into the economy, where eventually someone spends it, and it is taxed. I can think of several ways to tweak this system, but in general, I think it a sound proposal. I am all ears if anyone has a better idea!
So, in short, I would love to see all income and property taxes eliminated. We would replace them with less government spending, and a consumption tax, coupled with a "pre-bate system". School district funding would be completely replaced with a new system and a new paradigm, though I won't elaborate more on this now.
As for the proposal in North Dakota- from what I have read here, it does not sound like it was thought out very well, and we don't yet have all of the reforms in place that we need to make it a practical reality.
