Our current system of selective wealth taxation through the property tax is largely neglecting—and in some ways even worsening—these problems. Data from the Federal Reserve
indicate that the bottom 90 percent of families have more than half of their net worth tied up in real estate, whereas the top 1 percent have just 13 percent of their wealth in real estate. A similar pattern is present across race and ethnic groups: white families hold just 27 percent of their wealth in real estate while Black and Hispanic families hold 40 percent and 58 percent, respectively.
At the same time, real estate has also
been declining as a share of total net worth, meaning that the narrow property taxes we have on the books today apply to a
shrinking share of overall wealth.
In other words, wealthy families—particularly wealthy white families—have a far lower share of their net worth subject to property taxation than other groups. They also have a lower share of their wealth being taxed today than they did just a few decades ago, as intangible assets have grown in prominence. Given our nation’s high level of inequality, and the unequal opportunities it affords based on race and class, a return to a broader system of wealth taxation is worth a closer look.