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No one would describe Wisconsin’s homeowner property taxes as low. So it would likely come as a surprise to many Wisconsinites that state policymakers are now considering a plan that would cut business property taxes in a way that would force homeowner’s taxes even higher. The plan was the focus of a hearing before the Wisconsin legislature’s “Steering Committee for Personal Property Tax” last week at which ITEP staff testified.

The committee hearing focused on whether Wisconsin’s local property tax should continue to apply to business machinery and equipment, as it currently does, or should be narrowed or even repealed. Wisconsin is one of more than 30 states in which the property tax base is defined to include not just “real property” such as buildings and land, but at least some of the “personal property”—potentially including motor vehicles, machinery, office furniture, and more generally any property that can be moved—owned by individuals and businesses.

It might come as news to most Americans that personal property is even taxable. This is because almost every state moved away from taxing the personal property owned by individuals (with the notable exception of motor vehicles) long ago. This gradual contraction generally makes sense—having an assessor evaluate the value of every homeowner’s paper-clip collection would impose a huge administrative burden. But, as ITEP staff testified last week, what remains of the personal property tax in most states—a tax on machinery and equipment owned by businesses—is actually pretty sensible. The property tax was originally envisioned as a fairly universal levy on wealth used to generate income, and the expensive machinery used in manufacturing certainly fits that description. As last year’s tragic explosion at a Texas fertilizer plan reminds us, business personal property imposes its own substantial costs on local governments’ fire-protection and police-protection infrastructure, and the businesses that own this property should help to defray the public costs of maintaining this infrastructure.

Moreover, cutting business personal property taxes would impose a pretty direct cost on homeowners: the Wisconsin Legislative Fiscal Bureau estimates that simply repealing the tax would result in close to a 3 percent increase in Wisconsin homeowner property taxes. And as the experience of Ohio reminds us, state legislative pledges to “hold harmless” local governments for state-imposed property taxes tend to be pie-crust promises: easily made and easily broken. There are certainly sensible ways of reforming the personal property tax where it exists: allowing a de minimis exemption, so that the first $25,000 or $50,000 of personal property is exempt, can sharply reduce the compliance costs associated with the tax. But business personal property taxes are, at the end of the day, worth keeping.