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¶ … property taxes are regressive or progressive has been a hotly debated issue for most of the nation's history (Taxes on Wealth, Property, and Estates).
The traditional understanding regarding the levying of property tax was that such tax was a practical attempt at balancing the distribution of wealth in America. Those owning property were considered to be wealthier than those who do not and, therefore, taxing property owners in an effort to fund government function was believed to relieve the poor and pass the burden onto those who were in a better position to afford it (p. 677).
Property taxes are a form of a broader classification of taxes identified as wealth taxes (p. 675). These forms of taxes are applied against certain aspects of wealth with the most common form being property taxes which are based on the ownership of real estate. Real estate is open and apparent and impossible to hide or disguise so believed to be the best source for taxation (p. 676).
Some argue, however, that the assessment of property taxes in the United States has become regressive. That is, low-income homeowners pay proportionately more of their income on property tax than their high-income counterparts. This situation has developed as homeowner incomes have slowed while property values have raised rapidly. Not all experts agree on whether property taxes are regressive or progressive. Those who argue that property taxes are progressive point to the fact that property taxes tend to reduce the return on capital (p. 690). The net effect of this is that investment in poorer areas decrease and so do rents so that property values decrease as well. The lower property values serve to decrease the property assessments and, therefore, the corresponding property tax, however, there is a delay in the timeframe.
Whether or not property taxes are regressive or progressive will continue to be debated. Regardless, such taxes have become a mainstay and are not likely to be abandoned.
References
Taxes on Wealth, Property, and Estates.
Property & Income Tax
Tax Equity and Fairness Taxes on property are also known as ad valorem tax imposed on the real value of the estate or other assets that an individual owns. The local government imposes these property taxes and charges are on a recurring basis (Mikesell, 2014). For example, a homeowner either pays their taxes on a yearly basis or gives a monthly fee as part of the mortgage payments. It is worth
Taxes An evaluation of two types of taxes: Sales vs. income Sales taxes are invariably regressive taxes. Poorer people use a larger percentage of their taxes for consumption-related expenses, so they pay proportionately more of their income in sales taxes. For the wealthy, more of their spending is concentrated in savings and investments, since they can save a larger proportion of their income and still meet basic expenses. Of course, given that
It occurs due to the change in effective tax rates in the form of property tax amount related to the market value among the groups of property owners. It is known that the appraised market value in the form of yardstick for the property tax equity was used because it is considered as a reasonable way (Dennis-Escoffier & Fortin, 2007; Mikesell, 2011; Nelson, Collins, & Healy, 2008). Economic Effects The tax
Later, however Democratic leaders approved a bipartisan plan, minus the homestead tax increase. ("State income tax unthinkable," 2007) Income Tax Proponents, Opponents and Components Income tax proponents argue that even with Florida's exemptions for food and medicine, poorer people pay a higher percentage of their income in the form of sales tax than wealthier citizens. They argue that an income tax would prove to be fairer as sales tax is
Revenue Sharing Tax revenue sharing: A solution to the inequities in school funding? Tax revenue sharing is one of the most popular yet controversial potential solutions to the problem of inequitable funding of school districts. In the debate over fairness in education, the fact that property taxes are usually the primary method of school funding frequently leaves poorer districts with substantially less revenue than their wealthier counterparts. Revenue sharing is based upon
The flat tax is however somewhat higher in the income range from $30,000 to $90,000. For earnings of $100,000 and above the flat tax is lower since the current income tax has higher tax brackets which take effect in those categories. The following chart illustrates the rate at which taxes are presently collected under the current method of taxation and the taxes that would be collected under the Flat Tax