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Property Taxes on the Rise Again Across Nation

1 min readBy: Chris R. Edwards

Download Special Report No. 23

Executive Summary

In 1993, state and local governments across the United States will collect an estimated $193 billion in property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. es. The vast bulk of this, about $186 billion, will be collected by local government units including counties, cities, and school districts.

Property taxes in the United States have been rising steadily since 1980. While the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. revolts of the 1970s, led by California’s landmark Proposition 13, caused property taxes to level out during that decade, total property taxes paid by Americans are now 62 percent higher, in after-inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. dollars, than they were in 1980. Due to rapidly rising property taxes, local taxes are now growing faster than state taxes, reversing a trend of faster state tax growth through the 1970s and early 1980s. From 1985 to 1991, local tax revenues rose 60 percent compared to 44 percent for state tax revenues.

Polls consistently show property taxes are the least liked form of taxation. Property taxes have often been poorly administered and subject to political influence, leading to unequal and unfair assessments. In addition, they can be imposed so as to have a regressive impact and they can produce serious economic dislocations such as urban blight.

Despite these problems, property taxes continue to be the primary source of tax revenue for local governments, providing 75 percent of local government tax revenue.