About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 C. Lowell Harriss, Property Taxation in Government Finance Summary 1 (1974)

handle is hein.tera/ptrnmenry0001 and id is 1 raw text is: Property Taxation In Government Finance This is a summary of a 61-page study by the above title developed by Professor C. Lowell Harriss, economic consultant to Tax Foundation, Inc. The study (Research Publication No. 31) is available at a price of $2.50 per copy ($2.00 in quantities of 10 or more) from the Foundation's office, 50 Rockefeller Plaza, New York, N.Y. 10020. Property taxation, yielding $47.2 billion in 1973 and estimated to reach $51 billion in 1974, continues to be a major source of revenue for local governments. Their viability and independence may well depend upon their ability to utilize this source, one not used at all by the Federal government and only slightly by a few states. Administration in most states is a local responsibility and prop- erty taxation differs not only from state to state but within states. In much of the country inequality of assessment continues to be high, but in some places substantial progress has been made in reducing disparities. Economically, the property tax consists of two markedly dif- ferent elements. One bears on land, the other on man-made capital such as buildings, equipment, and inventories. Because the supply of land is largely fixed by nature, economists conclude that the tax on pure land values is capitalized into lower land prices and rests on the owner of the land. In contrast, the tax on man-made capital will influence the quantity of the productive resource, including housing and public utility facilities. The cost to businesses and the sup- pliers of rental housing is shiftable to the user; taxes which may not be passed on to the consumer will reduce the after-tax net returns to investors and will thus rest on the suppliers of capital. Whether the burden of the property tax is predominantly pro- portional with income, bears relatively more heavily on lower-income families (regressive), or increases as a percentage of income up the income scale (progressive) remains subject to debate. Facts undoubtedly differ from one community to another as do the magnitudes of the burdens. Recent relief provisions moderate, sometimes substantially, the burden on lower-income families, especially those over age 65. The 1973 per-capita national total for property taxes was $225, an average that included per-capita amounts over $275 in five states and under $125 in 16 states. In areas containing most of the country's assessed valuation, the annual tax exceeds 2 percent a year of full capital value. In many places the rate is over 3 percent and in places such as Newark, Boston, and New York City it is over 5 percent. The rates for much of the country are high enough to have effects which are significant beyond the revenue yielded. The tax influences the use of land, competition for new industry, community growth, and the maintenance and modernization of housing and business facilities. High tax rates increase pressures for exemption and may powerfully affect incentives for zoning and other determinants of development over metropolitan areas. Because of the local nature of property taxation, including administration, the effects (other than

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most