Senior Fellow Kevin A. Hassett

It has hardly received notice in the national media, but a tax revolt is breaking out all over America. In Florida, for example, the house and senate have separately passed property-tax-reform plans that would either reduce or eliminate property taxes altogether. Last year, South Carolina, New Jersey, and Idaho cut property taxes. New York, Arizona, Pennsylvania, and Rhode Island granted larger property-tax rebates and capped annual increases. Texas passed a $15.7 billion property-tax cut. Georgia's legislature just approved a $142 million property-tax cut, awaiting signature from Governor Perdue. Why, even Connecticut is on the move.

This stealthy revolt may have a major impact on the 2008 election.

Why the sudden interest in property taxes? A real-estate bubble might terrify financial markets, but it is welcome news to local governments that rely on property taxes to finance their activities. The common practice is to leave property-tax rates uncut, and thus to allow revenues to skyrocket as home prices do.

Prices have gone up a lot, and taxes have marched right up with them. As a result, the rate of increase of property taxes has been nearly unprecedented. Between 2000 and 2004 (the latest year for which we have data), property-tax payments have risen an astounding 27.7 percent nationwide. No wonder voters are angry enough to seek relief. It seems unlikely that local government services have improved 27.7 percent over the same time period.

These taxes have not risen uniformly. As illustrated in the accompanying chart, some states have been hit much more severely than others. The red states (forgive me) in the chart are those that have seen their taxes increase by more than 30 percent. These states include key swing states such as Florida, and 2004 blue states California, Maine, and Wisconsin.

The depth of despair over high property taxes and widespread attempts to roll them back have a political precedent. In 1978, the voters of California approved Proposition 13, a measure that rolled back property taxes by an average of 57 percent. The revolt spread across the country. Even Massachusetts, perhaps the most liberal state in the Union, passed its own "Proposition 2-1/2" in 1980. Proposition 2-1/2 limited the growth rate of property taxes to that percentage.

Ronald Reagan adeptly capitalized on the anti-tax sentiment, agreeing to do a radio ad in favor of Proposition 13 back in 1978, and then riding the tax-revolt wave all the way to the White House (winning even Massachusetts). As Joel Fox recalled in an article for National Review Online, Reagan called Proposition 13 "the first amazing shot in the nationwide tax revolt."

Today's tax revolt is long past its first shot. As presidential candidates attend town-hall meetings and learn about voters' concerns, some of them will surely spot the same opportunity that Reagan did.

Kevin A. Hassett is a resident scholar and director of economic policy studies at AEI.