I said yesterday that David Chastain earned my vote, and he did. There is, as always, a caveat.

At some point in the ALL-GA forum, Chastain touted his credentials as a real estate person knowledgeable in the field of Urban Economics. He pointed out that school systems depend primarily on property taxes for their revenue, and that the coming real estate bubble is about to burst — pulling the rug out from under school systems. He’s likely leading to the usual Lib drivel touting the FairTax fraud.

First, real estate is primarily a locally driven economy. If there is a housing bubble in Georgia, it’s very slight. Thanks especially to the continuing growth of the Atlanta region, it’s unlikely that property tax revenues are on shaky ground. Chastain’s real purpose was to conjure up a boogeyman, which tends to be a winning strategy for Georgia politicians.

The reality of local taxes is that there is a danger in relying on any single tax. In Palo Alto, the local government has been trying to attract more car dealerships, which seems like a bizzare thing to do (as discussed: Smart City, October 10 edition). As it turns out, more than half of Palo Alto’s tax revenue comes from sales taxes. A car sale, it turns out, carries a great deal of sales tax. Portland, in contrast, does not have a sales tax, so the city’s land use policies are driven by how much property tax revenue they can generate.

This goes to show that the way a community structures its tax base will strongly influence how the community shapes itself. With sales taxes, there will be more retail. With property taxes, there will be more high-value usage of the land. With payroll taxes, there will be more office space.

The primary reason why so many Libs choose property taxes as one of their boogeymen is they know that property taxes are the number one most hated tax, and sales taxes are the least hated. Having said that, in light of Chastain’s position on the tax base for public schools, there is a serious caveat to consider. Do we want more car dealerships, big box retail and sprawl, or should local communities carry a mixed tax base — and therefore exercise their right to define their local character with more care?