Can a government tax "land"?

Question

This question is inspired by this other question also on Politics SE.

My understanding of the way US law works (or in fact most property law in most of the developed world) is that, for various reasons, when a person owns real estate, that person does not, in fact, own the land on which the real estate is built; rather, they own some kind of a lease agreement or something which provides that person the right to build things on that land and do things on that land freely so long as the lease agreement is in place. The other party in the lease agreement is the government.

The effect of this is that it provides the government the right to effectively "take your land" if they want to. In practice, this means that if the government wants to, for example, build a road through your house, they will give you some money of proportionate value to your house (there are laws, I believe, which prevent the government from wholesale repossession of your house; they have to give you something for it), and knock down your house, and build the road, and there's not a heck of a lot you can do about it, because they're the lease owner and you're the tenant.

Here's the question: Let's say the government proposed a tax as suggested in the linked question. Would that mean that the government would cede the right to require you to vacate the premises of your house if the government wanted to repossess the land, because you own the land and the government can't repossess something they do not own? In such a case, what would happen if the government wanted to build a road through one's house, and that person just said "no thanks I want to stay here"?

Answer 1

My understanding of the way US law works (or in fact most property law in most of the developed world) is that, for various reasons, when a person owns real estate, that person does not, in fact, own the land on which the real estate is built; rather, they own some kind of a lease agreement or something which provides that person the right to build things on that land and do things on that land freely so long as the lease agreement is in place. The other party in the lease agreement is the government.

Your understanding is incorrect. In the United States, land can be owned by private individuals and often is (most government land is public parks). Some other issues:

1. Eminent domain does not rely on government ownership of the land. It allows the government to buy land (and other real property) from its owners at a "fair" price. The owners often don't find the price fair, so that can be settled in court.

2. There are generally three separate government entities with property taxes in the US:

   • The local municipality (city, town, borough, etc.).
   • The county.
   • The school district.

   Each of these entities can levy a separate property tax and is not dependent on the others.

There are groups that want the system to work the way that you describe. For example, that's how geolibertarians approach taxation. Their theory is that real estate taxes are the only legitimate taxes because they can work that way. But under current law, the system does not work that way.

Let's say the government proposed a tax as suggested in the linked question. Would that mean that the government would cede the right to require you to vacate the premises of your house if the government wanted to repossess the land, because you own the land and the government can't repossess something they do not own? In such a case, what would happen if the government wanted to build a road through one's house, and that person just said "no thanks I want to stay here"?

No, since eminent domain is not grounded in government ownership of land but is a power to take land in return for compensation (at least as defined in the US).

Incidentally, the answer to the question of "can a government tax land?" is yes. For a long time, Pittsburgh (in Pennsylvania) had separate taxes on land and buildings with different rates. So in the US, it is possible for a government to tax land.

Answer 2

You seem to be confusing a land tax (paying an annual levy in relation to how much land you own) with eminent domain (being legally required to sell land to the state).

The fifth amendment prohibits "private property be taken for public use, without just compensation". This prohibits a federal, state or local government from simply taking your property, but it does not prohibit them from forcing you to sell it to them for at least market value. (There may be some additional restrictions in individual state constitutions.)

Answer 3

The Constitution (section 174) of the state that I live in states:

All property, whether owned by natural persons or corporations, shall be taxed in proportion to its value, unless exempted by this Constitution; and all corporate property shall pay the same rate of taxation paid by individual property.

This is an ad valorem (based on the value of the item) tax.

because they're the lease owner and you're the tenant.

This is incorrect. You own the land. If the government has a public need for the land, such as building a road, or hyperspatial bypass, then they are required to fulfill the eminent domain process. It is a complicated process that ends up requiring the government to pay fair market price for your property.

I ran for elected office in Denver. At that time, the public transit system was being expanded and eminent domain was required to obtain property. Some people tried to game the system by demanding far more for their property than it was worth - that didn't work. Some people just didn't want to sell, and again, for the public good, it is unreasonable to allow a single individual to have total veto power over large public works projects.

and that person just said "no thanks I want to stay here"?

It ends up in court. Some of the politicians involved had 24-hour police protection due to credible death threats by angry people who didn't want to move. Even corporations who said "we aren't moving unless you pay us $500,000,000" didn't get their wishes. In Colorado, the government was not permitted to pay more than the market price for property.