Just in time for Christmas – which comes with holiday expenses related to gift-giving, food, travel, and more – it’s also time to pay property taxes.

The National Realtor’s Association estimates that 80% of all mortgage holders use an escrow account to pay property taxes. That’s where your mortgage lender tacks on an additional amount to your monthly bill to cover these taxes (and sometimes insurance) and pays them for you at the end of the year. If you use an escrow and don’t look closely at your statement, you may not even notice how much of your money is being taken by the local government just for owning a home or land.

Even if you rent, you pay property taxes because your landlord almost assuredly rolls that expense into your monthly payment.

When my family refinanced our mortgage some years ago, we chose not to use an escrow account to keep our monthly mortgage payment as low as possible. But as local property values have steadily increased, so has our tax assessment, and this year my eyes popped when I saw the bill.

I grumbled mightily as I wrote the check, thinking about other important family expenditures we’d need to defer for a while so local public schools, the Warren County government, and the city of Bowling Green can get their cut first.

No one likes paying taxes. Some states are even considering proposals to force local governments to limit property taxes or eliminate them altogether. But as taxes go, are property taxes the “best” when compared to the other kinds, like income and sales taxes?

That’s the argument made recently by Jared Walczak, the vice president of state projects at the Tax Foundation, a nonpartisan tax policy organization. Writing for the Substack “Liberty Taxed,” Walczak argued that from a free-market perspective, property taxes are the most transparent and least harmful to the economy.

“It may be asking too much for most people to like property taxes,” Walczak writes, “but all policy choices involve trade-offs, and for those who care about economic efficiency, neutrality, decentralization, and government accountability, the property tax deserves to be rated highly, if not in absolute terms, at least relative to the alternatives.”

According to Walczak, research has shown that sales taxes are associated with stronger local and state economic growth compared with income taxes (which appear to stifle the economy), but property taxes are even better in this regard. States that would reduce or eliminate their property taxes would be forced to either massively cut government spending (which is politically unrealistic) or massively increase income or sales taxes, neither of which are especially good for the economy.

But Walczak’s most compelling argument is that, unlike most income taxes and totally unlike sales taxes, you can actually see with your eyes where most of your property taxes are going. When you drive by a school, visit a local park, or see police and firefighters at work in the community, you have an immediate sense of what you’ve been paying for.

You can assess whether you’re getting your money’s worth, and you know exactly who to talk to if you’re unsatisfied with your return on investment. Your local board of education members, city commissioners, and magistrates – people you may know personally – are directly accountable to the local community for where your tax dollars are going.

I still don’t like sending in this big check to the city and county, but as a conservative who believes in decentralizing government, I’d rather keep my tax money local, and wrangle with my neighbors about how it’s being spent.

— Gary Houchens, PhD, is director of the educational leadership doctoral program at Western Kentucky University.