Originally published on Substack. 

​​If you want a clear snapshot of what’s contributing to Texas’ affordability crisis, look no further than property tax bills.

A recent Houston Chronicle article by EricaGrieder highlighted just how punishing these taxes have become in fast-growing suburbs of Houston.

​Cities like Conroe, Pearland, and The Woodlands now rank among the highest in property-tax burdens in the nation when measured as a share of household income.

In Conroe, homeowners pay a median property tax bill of nearly $5,900 on a median household income just over $114,000—5.2% of income. Pearland isn’t far behind near 5%. Even high-income areas like The Woodlands face bills approaching $9,000 a year.

This isn’t just a Texas problem, but it is becoming a Texas test. And the verdict is clear: property taxes are harsh, unworkable, and incompatible with prosperity.

Why Property Taxes Are So Harmful
​
Property taxes don’t rise automatically because “the market” failed. They rise because local governments choose to spend more, then set the tax rate to collect more taxes that cover spending.

Local taxing entities—school districts, cities, counties, and special districts—set tax rates every year. Those rates are applied to the county’s appraised values that tend to rise quickly over time, especially in growing communities. Even when officials claim they’ve “lowered the tax rate,” it is often not enough to offset higher appraisals when spending continues to grow.

In other words, appraisals help set the base—but spending decisions determine the bill and the tax rate to get there.

That’s why property taxes are uniquely destructive. All taxes are destructive but some more than others. Families can budget for purchases and sales taxes. They can plan their work or leisure around income taxes. But property tax payments are due regardless of income, job loss, or retirement—driven by government budgets, not household choice.

Data from SmartAsset confirm this reality nationwide.

Their 2025 study shows Texas ranks among the states with the highest effective property-tax burdens, a point echoed by the Tax Foundation.

This tax system punishes homeownership. It turns ownership into something closer to renting from the government.

The Moral Case Against Property Taxes

There’s also a deeper issue here—one that often gets ignored.

Property taxes violate the basic principle of property rights.

If you must keep paying the government simply to remain in your home, then you don’t truly own it. And for seniors on fixed incomes, young families stretching to buy their first home, or small businesses operating on thin margins, that’s not just inefficient—it’s unjust.

These taxes are fueling the affordability crisis created by years of bad policy: excessive spending, loose fiscal rules, and governments that grow faster than the taxpayers’ ability to pay for it.

Families didn’t create this problem. Government did.

A Responsible Path to Elimination

The good news is that eliminating property taxes can be done responsibly—without gimmicks, carve-outs, or distortions like ever-larger homestead exemptions, flawed appraisal caps, or arbitrary age freezes, which have been thrown around by key leaders in Texas.

The most realistic path forward currently is likely a surplus buydown strategy, paired with strict spending limits, which Gov. Abbott rightfully made a local spending limit the number one item in his property tax plan.

Here’s how it works:

• At the state level, use budget surpluses—generated by economic growth, not tax hikes—above a strict spending limit to permanently compress (“buy down”) tax rates and eliminate school district M&O property taxes, starting immediately and continuing until they reach zero.
• At the local level, cities, counties, and special purpose districts should adopt the same approach simultaneously, using surpluses above the state’s population growth plus inflation to eliminate their property taxes over time. In places that can’t, they should consider refining in spending to reduce property taxes, join a compact with nearby localities for services and funds, and consider ways for more growth in a sales tax base to eliminate them.
• Rollback rates must become true no-new-revenue rates, and exceeding them should require a supermajority vote of voters, not politicians, on a uniform election date.

The key is discipline. None of this works without strict limits on spending growth, ideally capped below population growth plus inflation. Spending is the ultimate driver of property taxes—and the ultimate burden of government.

What About Other Options?

There is a faster, more comprehensive option: redesigning the tax system by broadening the sales-tax base without a VAT while keeping the state-local sales tax rate competitive, potentially eliminating property taxes much sooner than the surplus buy-down approach. The state’s sales tax rate would just cover the school district property taxes and local governments’ sales tax rates would cover their property taxes where possible.

My research finds that we could be at a state-local sales tax rate of at most 8.75% with a broader sales tax base from 8.25% today to eliminate school district M&O property taxes.

Any additional sales tax revenue collected by local governments at their lower rates from the broader sales tax base and dynamic growth must go to reducing their property taxes through tax rate cuts.

This allows lower local property taxes, then local governments can use the surplus buydown approach to eliminate the rest, where possible.

Done correctly, dynamic growth effects and spending restraint should lower the overall tax burden and deliver immediate property ownership to all Texans.

In my view, this redesign approach is stronger.

But politically, the surplus buydown seems the most viable path today—and importantly, it still moves us in the right direction.

Either way, the non-negotiable principle remains the same: less spending, not higher taxes.

States like Florida are beginning to explore similar pro-growth approaches, recognizing that affordability and competitiveness depend on limiting government’s footprint—not expanding it.

The Bottom Line

Property taxes are not a law of nature. They are a policy choice.

Texas can lead by choosing a better path—one that respects ownership, restores affordability, and lets families keep more of what they earn.

Eliminating property taxes won’t solve every problem overnight, but it would remove one of the biggest obstacles standing between Texans and prosperity.

The question isn’t whether we can afford to do this.

It’s whether we can afford not to.

Originally published on Substack. 

A recent post on X from Barrett Lindberg made the rounds, warning Texans that eliminating property taxes is “a mathematical lie.” His thread paints a dramatic picture: Texas balanced on a “two-legged stool,” forced to choose between sky-high sales taxes or deep state control over local communities. According to him, property-tax elimination is not just unrealistic—it’s dangerous.

Here’s Barrett’s analysis if you haven’t seen his post on X.

He makes good observations about the structure of Texas finances, the role of local governments, and the mechanics of school finance. But the conclusions are ultimately flawed because they miss the most important point: the problem is not taxation—it’s spending. And spending at every level of Texas government is growing far faster than Texans’ ability to pay.
​
I said as much in my response.

Barrett is right that you can’t “delete $81 billion” of property taxes without replacing it. What he overlooks is that Texas doesn’t need to replace every dollar—it needs to spend less!

That’s the heart of the issue. And the only way to build a future of real homeownership and prosperity is to confront spending directly, not hide behind doomsday math. That’s the way in Washington, but shouldn’t be the way in Texas.

The Real Problem: Overspending, Not Undertaxation
​
Local property taxes in Texas now exceed $80 billion per year, up roughly 70 percent from 2015 to 2024, while population growth plus inflation rose only 50 percent. That’s not the “two-legged stool” Barrett describes. That’s a spending stool whose legs keep growing while Texans keep shrinking under the weight.

And it’s not just schools. Cities, counties, hospital districts, appraisal districts, and special taxing districts have been expanding their budgets year after year. When government gets bigger, property taxes follow—no matter what relief gimmicks lawmakers pass.

This is why homestead exemptions don’t solve anything. They don’t reduce spending; they simply shift the tax burden from one group of taxpayers to another.

If Texas doesn’t restrain spending, then no tax structure—three-legged or two-legged or twenty-legged—will ever feel stable.

The Moral Failure: Texans Shouldn’t Have to Rent Their Homes from Government

Property taxes are not just inefficient; they are immoral. They violate the basic principle that individuals should control the value they create and the property they acquire through voluntary exchange. Once a homeowner pays off the mortgage, that home should be theirs—secure, not subject to a perpetual ransom demanded by local government.

No tax that allows the government to seize your home for nonpayment should ever be defended as “good policy.”

Property taxes are also highly regressive. The Texas Comptroller’s Suits Index shows that property taxes fall hardest on lower- and middle-income families. Meanwhile, renters pay property taxes in their rent, and small businesses pay them through commercial leases. The economic burden is everywhere, even where the tax bill isn’t.

Barrett is correct that property taxes hit high-value properties. But he ignores the enormous harm to families trying to build wealth or retire in dignity. If the state’s goal is prosperity, mobility, and ownership, property taxes are the most anti-ownership tax imaginable.

For more on this, check out my property tax research archive.

The Economic Path Forward: Sustainable Budgeting

Now to the economics. Barrett warns that replacing property taxes would require a 20 percent sales tax. But that’s only true under one assumption: that government continues spending at today’s levels.

Texas doesn’t have a revenue problem. It has a spending problem.​

The real solution is simple: adopt a sustainable budget—lower spending now and a growth limit that keeps state and local spending increasing slower than population growth plus inflation thereafter. When spending stays below that threshold, surpluses naturally emerge. Those surpluses should be used to permanently buy down school district property taxes through rate compression—the first and largest component of the levy.

Texas already dipped its toes into this model with tax-rate compression, which Barrett praises. But compression alone is not a long-term strategy because it still allows local spending to grow faster than the average taxpayer’s ability to pay.
The sustainable budget model is a short-run and long-run strategy.

If lawmakers embraced a strict spending limit and used every surplus dollar to buy down school district maintenance and operations property tax rates, Texas could eliminate school district property taxes quickly. Cities, counties, and other local covenants could do the same by holding spending below the limit and using their own surpluses to ratchet down their rates.

No 20 percent sales tax (this is fearmongering). No centralization (except school district funding which the state already controls). No fiscal cliffs (boom and bust cycles). Just disciplined budgeting (like many families).

The 21st-Century Solution: A Single, Simple Sales Tax

Barrett mocks the idea of a sales-tax-based system. But he misses the economic truth: broad-based consumption taxes are the least burdensome tax structure available.

Texas already relies heavily on sales taxes on final goods and services, but they’re riddled with exemptions. Clean up the base, remove carveouts, and modernize it for a 21st-century economy, and Texas could support core services with far less distortion and far more transparency.

This is the model I’ve written about for years:

• Sustainable budgeting with less spending and strict spending limits
• Broad, flat sales tax on final goods and services
• No income tax
• No property tax
• No other taxes or fees

A one-stool system—not the wobbly two-legged one Barrett describes. Think bar stool. Think barber stool. Sturdy. Simple. Hard to kick over.

What Texas Needs Now: Courage

Barrett’s final claim is that elimination “sounds like freedom, but it’s centralization.” What centralizes power is a finance system built on runaway spending and endless property taxes that force Texans into permanent dependence. What decentralizes power is letting Texans own their homes outright and forcing governments to live within their means.

Texas doesn’t need bigger taxes. It needs smaller government. It doesn’t need “rate compression forever.” It needs a path to elimination. It doesn’t need fear about the math. It needs courage, conviction, and leadership that trusts Texans more than bureaucracy.

The truth is simple:

Texas can eliminate property taxes.

Texas should eliminate property taxes.

And if policymakers embrace sustainable budgeting, Texas will eliminate them.
​
Freedom begins when government spends less so Texans can prosper more.

Originally published on Substack. 

​Every Halloween, my kids remind me what imagination looks like.

This year, one’s charging around the house as a velociraptor, another’s slipping on a banana costume, and my youngest is galloping through the living room as a unicorn — laughter, chaos, and joy everywhere.

It’s the best kind of crazy.

But as they run around pretending to be dinosaurs and fruit, I can’t help but think: maybe they’ll grow up and realize that the real monster in the room isn’t under the bed — it’s in the tax code.

And this year, that monster is the property tax.

🏠 The Real Horror Story

Imagine this: you work hard, save for years, finally pay off your home… and then the government shows up demanding a yearly ransom just so you can stay in it.

If you refuse, they’ll take it back.

That’s not ownership — that’s permanent rent to the state.

That’s the plotline of America’s longest-running economic horror story.

Thanks to Adam Michel and his Liberty Taxed newsletter. I’m honored he invited me to join it — and grateful to see an issue I’ve spent decades working on with many great people finally getting national attention.

In the latest discussion:

• I wrote The Case Against Property Taxes — arguing that true ownership means freedom from perpetual taxation.
• Jared Walczak countered with The Free-Market Case for Property Taxes — a thoughtful argument about accountability and local governance.
• And Adam Michel, who brought the conversation together (and later at the Cato Institute), reminded us why civil debate still matters in economics.

​It’s rare these days to see people disagree with respect, data, and principle — but that’s exactly what happened.

👻 Why the Property Tax Monster Never Dies

The reason property taxes keep coming back, no matter how many times we “reform” them, is that they feed on the one thing politicians can’t resist: spending.

Every time local budgets balloon faster than population and inflation, property taxes rise from the dead.

Every “exemption” or “relief” is just a Band-Aid on a zombie.
​
Economically speaking, property taxes:

• Punish productivity — the more you improve your home, the higher your tax bill.
• Discourage investment — people fear adding value when it means paying more.
• Fuel government growth — endless appraisals justify endless spending.

As I’ve written across my research and columns, lasting prosperity comes not from tinkering with taxes but from restraining spending and restoring ownership.

We should phase out property taxes entirely and move toward consumption-based systems that reward work, saving, and entrepreneurship.

🦖🍌🦄 Economics at Home

Back at my house, the velociraptor just stole candy from the banana, and the unicorn is defending her bucket with glitter-covered fury.

It’s a hilarious reminder that incentives matter — even in Halloween economics.

People (and kids) respond to incentives. So do governments.

If we reward overspending, we’ll get more of it.

If we reward responsibility and ownership, we’ll get prosperity.

The same principles I teach my kids — work hard, tell the truth, take responsibility — are the same ones that built this country. And they’re the same ones property taxes erode, little by little, every year.

💀 The Lesson Beneath the Mask

So yes, this Halloween, while the costumes go back in the closet and the candy wrappers pile up, the property tax monster will still be lurking — waiting for the next appraisal notice to hit mailboxes.

But there’s good news: people are waking up. States must rein in state and local government spending and finally slay this fiscal beast: property taxes.

The debate sparked by Adam Michel at Liberty Taxed isn’t just about numbers — it’s about the philosophy of freedom. And the more we talk about it, the more light we shine on the monster in the dark.

Originally published on Liberty Taxed. 

Property ownership is the cornerstone of a free society. It reflects the natural right of individuals to control what they create, earn, or voluntarily exchange with others. From that right flows responsibility, independence, and the ability to build a legacy.

Yet today, homeowners must pay the government every year simply to keep what they already own. Property taxes are not a reasonable price for local services—they are an outdated, overly coercive, and economically destructive way to fund government. They should end.

Across Texas, Florida, Wyoming, Iowa, and Montana, more people are realizing that property taxes—once accepted as a “necessary evil”—are neither necessary nor moral, especially when government spending is not properly restrained. The principle is simple: nothing is free, but ownership should be secure once it’s earned.

​Property Taxes Undermine Ownership and Prosperity

Property is the foundation of liberty. It represents the right to the product of voluntary exchange, investment, and saving—not a privilege granted by government. To tax property again every year after it has been bought with after-tax income is to deny genuine ownership. Property taxes operate like an annual wealth tax or unrealized capital-gains tax, applied regardless of income or ability to pay.

Defenders argue that property taxes are “good” because they connect local services to local funding. I understand the intuition—communities need schools, infrastructure, and public safety—but it assumes government spending is inherently justified. It isn’t. The moral and fiscal failure of property taxes lies not only in how the money is raised, but also in how much government spends.

When government grows beyond its limited role of protecting life, liberty, and property, it erodes the foundation of those rights. Property taxes turn citizens into perpetual tenants of the state. The idea that people can “own” what the government requires an annual payment for contradicts the essence of a free society.

The Regressive and Hidden Nature of Property Taxes

Property taxes fall hardest on lower- and middle-income families because housing costs make up a larger share of their budgets. High-value properties are often under-assessed, while modest homes are over-assessed. The Texas Comptroller’s Office uses the Suits Index to measure the tax incidence of different taxes in Texas and consistently ranks property taxes among the most regressive.

But it’s worse than the tax incidence data suggest. Property taxes also hit people who never receive a property-tax bill. Renters pay indirectly through higher rent, and business owners pay through commercial leases, lower wages, and reduced investment. For millions of Americans, property taxes are the least visible yet most unavoidable form of taxation.

They also distort behavior. The lock-in effect discourages families from moving because new homes trigger higher assessments, while the push-out effect forces seniors and low-income residents from homes they’ve already paid off. These distortions are not captured in incidence studies, making property taxes uniquely harmful—penalizing both entry and exit from the housing market.
​
No tax that allows the government to seize a family’s home for nonpayment can be considered good. That isn’t sound public finance, it’s legalized coercion.

Overspending, Not Undertaxation

The Tax Foundation’s Jared Walczak notes that property taxes supply roughly 70 percent of local-government revenue and argues that replacing them would be difficult. He’s right that any transition must be designed carefully, but he assumes that today’s level of state and local spending is acceptable. It isn’t.

Across the country, overspending is the root cause of the property-tax crisis. High property tax shares are a symptom of the problem that needs to be addressed, not a reason to abandon reform as property taxes become an increasing burden.

• In Texas, local governments now collect more than $80 billion in property taxes—up roughly 70 percent from 2015 to 2024, while population growth plus inflation rose only 50 percent, even after several years of high inflation.
• Florida collects about $55 billion per year—nearly equal to all its state-level taxes combined.
• In Montana and Wyoming, property-tax collections have surged even though energy revenues could have offset some of the burdens.

Some also argue that reliance on property taxes is necessary because sales taxes or other revenue sources are too volatile. But families, not governments, deserve income stability. Revenue fluctuations should be managed through sustainable budgeting and rainy-day funds, not by taxing people out of their homes.

In Texas, property-tax revenues are actually less stable than many believe. From 1998 to 2024, the standard deviation for sales-tax growth was 0.057, compared with 0.037 for property taxes. The overall trend shows property taxes rising much faster and disconnected from economic activity or taxpayers’ ability to pay.

Sustainable Budgeting: The Principle for Every State

While eliminating property taxes entirely will take time, every state can start by adopting sustainable budgeting—ensuring that government spending grows slower than population growth plus inflation. This limit should serve as a ceiling, not a target. When governments live within it, surpluses emerge from a faster-growing economy supporting increased tax revenue that exceeds spending.

States should use those surpluses to permanently reduce, and eventually eliminate, school district property taxes. The tool used for this process should not pick winners and losers through property tax exemptions and abatements, or by short-term tax swaps that increase sales taxes to reduce property taxes, which simply shift the heavy burden elsewhere.

Because education is largely a state responsibility, states can gradually replace school-district property-tax funding with simpler, broader, and more transparent sources—such as a low, uniform, flat sales tax on final goods and services (not a VAT)—while constitutionally prohibiting the return of property taxes.

Local governments can apply the same surplus-buydown approach to lower their property-tax rates over time or use tax swaps to eliminate them. Differences in tax bases—property-rich versus sales-tax-poor areas—can be managed by reducing spending, forming local compacts, and establishing shared service arrangements rather than implementing state mandates.

Debt-financed property taxes are more complex, but they are also local choices. Voter-approved debt should continue to be repaid locally until retired; it should not be socialized across jurisdictions. The state’s focus should remain on eliminating school-district property taxes while advancing universal education savings accounts, which allow money to follow students directly and simplify school finance over time.

​This principle applies everywhere:

• States without income taxes (Texas, Florida, Wyoming) should prioritize property-tax elimination next.
• States without sales taxes (like Montana) should pair property tax elimination with strong spending restraint and targeted consumption-based alternatives.
• States with all three central taxes should prioritize controlling spending before pursuing any tax swaps or other tax changes. For states with income taxes, the surplus buydown method should be used to eliminate them first.

The goal is not revenue neutrality—it’s smaller government in terms of taxes and spending.

The Moral and Economic Case for Ending Property Taxes

Property taxes distort markets, destroy mobility, and erode liberty. More fundamentally, they violate the natural right to ownership—the right to control one’s property free from perpetual government claim.

Property tax relief is about redesigning government to live within its means. When governments spend and tax less, they unleash growth, investment, and genuine ownership.

Originally published on Substack. 

The Texas House delivered a win for taxpayers today by rejecting the SB 10 conference report. Lawmakers rightly balked at a bill that excluded local governments with fewer than 75,000 residents from the new 2.5 percent voter-approval tax rate, leaving millions of Texans unprotected. More importantly, SB 10 failed to cut property taxes—it merely slowed their growth, the same kind of budget gimmickry Washington calls “spending cuts.”

Texans know better. We don’t need half-measures that nibble at the edges. We need a real solution: eliminating property taxes once and for all.

​The Problem Isn’t Revenue. It’s Spending.

Over the last two budget cycles, the Texas state budget has grown by nearly 40 percent—roughly twice the rate of population growth plus inflation. Under a sustainable budget, growth should have been capped at that metric. Instead, spending surged, eating up surpluses that could have been used for tax relief.

At the local level, it’s no better. Local government spending continues to skyrocket, wiping out much of the state’s efforts to reduce school property taxes. For example, local government debt per capita in Texas is $8,627—among the highest in the nation, trailing only California and New York.

The result: Texans pay one of the highest effective property tax rates in the country. At 1.36 percent of owner-occupied housing value, Texas ranks 7th-highest according to the Tax Foundation. Property tax bills have ballooned despite increases to the homestead exemption and rate compression. Why? Because unchecked local spending keeps driving levies higher.

The Burden on Families

Property taxes are more than just numbers on a bill. They are a perpetual rent to government, a tax on unrealized capital gains that erodes the very idea of homeownership. Texans never truly own their homes—they rent them from government for life.

Families are being squeezed. Inflation remains above the Federal Reserve’s target, wages are being eroded, and housing affordability is declining. Adding to the burden, local governments continue to push for new spending, debt issuances, and taxpayer-funded lobbying campaigns to preserve their power.

This is why taxpayers are restless. The fight is not just about slowing tax increases—it’s about restoring economic freedom and ensuring Texans can keep more of what they earn.

Why SB 10 Fell Short

SB 10 aimed to lower the voter-approval rate multiplier from 3.5 percent to 2.5 percent, but only for larger jurisdictions. That exclusion left vast portions of Texas unprotected, particularly fast-growing mid-sized counties and cities where the property tax squeeze is most acute.

Worse, SB 10 failed to address the root cause: spending. Without hard caps on local budgets, governments will continue to grow by exploiting loopholes, raising fees, and issuing debt. Limiting the rate of increase without curbing spending is like patching a leaking roof without fixing the hole.

Texans deserve better than symbolic reforms.

The Momentum Is Growing

The rejection of SB 10 shows momentum is shifting toward real reform. Texans are demanding more than incremental tweaks.

Florida Gov. Ron DeSantis recently announced he would put the question of abolishing property taxes before Florida voters. He put it plainly: “If you own your home, to truly own it, you have to own it free and clear of the government. You shouldn’t have to pay rent to the government.”

If Florida is moving toward bold reform, why shouldn’t Texas? We have every advantage: no personal income tax, a strong workforce, abundant energy, and relatively lower overall state spending than many other large states (but still way too high). But those advantages are undermined by sky-high property taxes and regulatory bloat.

Meanwhile, states like California and New York continue to hemorrhage people because of big-government models that Texas risks replicating if spending isn’t restrained. Florida, our closest competitor, has also shown that it’s possible to pursue aggressive tax reform while maintaining strong economic growth.

A Path Forward

Texans don’t just want relief. They want ownership. Here’s the principled, practical path forward:

• Spending restraint first. Enact strict state and local spending limits tied to less than population growth plus inflation. That’s a good measure of the maximum growth taxpayers can afford. Past excesses justify spending growth that is even slower—or cut.
• Surplus buy-down. Dedicate state surpluses to eliminate school district M&O property taxes until they reach zero. Dedicate local surpluses to eliminate their property taxes.
• Sales tax redesign. If needed, redesign the sales tax with a broader base and lower rate applied to final goods and services—not a VAT.
• Uniform protections. Cover every local jurisdiction, every dollar of revenue, and eliminate carveouts like disaster exemptions that politicians use to sidestep limits.
• Constitutional reform. Make it permanent. Enshrine elimination in the Texas Constitution to prohibit future legislatures from reversing course.

Why Not Eliminate Property Taxes?

Critics claim it can’t be done. The truth is, it can—if lawmakers have the courage. Spending is the problem, not revenue. With disciplined budgets, surpluses dedicated to relief, and a redesigned tax system if necessary, Texas can become the first large state to eliminate property taxes.

As DeSantis said, the real question is not can it be done—it’s why not?

Conclusion

The Texas House was right to reject SB 10’s weak conference report. But stopping a bad bill is not enough. Lawmakers must seize the momentum for real reform. Property tax elimination is not only possible—it’s necessary to secure Texas’s future.

Texas families with property deserve true owners had, and a government that lives within its means. That won’t happen with half-measures. It will happen only when lawmakers restrain spending, dedicate surpluses to tax relief, and take the bold step of ending property taxes once and for all.

Texas has the chance to lead the nation. The question is: will lawmakers have the courage to act?