Some Takings Are Absurd

COURTS UNDERMINING PRIVATE PROPERTY RIGHTS?

Supporters of the two-rate property tax, America's fastest-growing tax reform, will have a tough job ahead of them if local governments abuse the power of eminent domain. When governments act to support corporate welfare instead of invidivual rights, of course the citizens will be suspicious of any fundamental reform of property taxes. Advocates of the two-rate property tax must loudly oppose such government abuses.

The new article below shows how local governments can upset citizens and make serious discussion of property tax reform difficult.

"Property Taking Favors Big Guy Over Little Guy," USA Today, May 4, 1998.

Various court decisions in recent years have allowed local governments to take private property and turn it over to other private persons under the guise that the transfer is aimed at "public use."

At the request of developer Donald Trump, the Casino Reinvestment Development Authority in Atlantic City, N.J., moved to condemn a family-owned Italian restaurant, an elderly widow's home and a privately owned shop so that he could build a parking lot across from his Plaza Casino and Hotel -- an action that courts have so far favored.

Ten families in Hurst, Texas, are now fighting the demolition of their homes so that private developers can erect a shopping mall.

In 1993, ten Denver families lost their homes at the behest of private businesses which wanted to build there.

In 1981, General Motors convinced Detroit officials to evict 3,500 people and dislocate 130 small businesses in nearby Poletown to make way for a GM plant.

Legal experts report that constitutional tradition restricted the states' power of eminent domain to situations tied to a public purpose until 1930. Private property could not be transferred over the owners' objections to other private parties. "Public uses" were limited to public works and utilities.

But over the past 60 years, all but a handful of states have done away with the constraints. In 1984, the U.S. Supreme Court -- in a case involving the Hawaii Housing Authority -- ruled, in effect, that "public use" is no more than what a legislature defines it as.

Property rights advocates maintain the courts have abdicated their responsibility to protect individual rights and limit government powers. They claim that until a new ruling returns substantive meaning to the "for public use" concept, governments will continue to take property for any reason they see fit.