ERIC Number: ED396436
Record Type: RIE
Publication Date: 1996-May
The Property Tax in the 21st Century.
This paper discusses the current role of the property tax as a revenue source for state and local governments. It is written for state and local policymakers and others interested in property taxes, including those who lack an indepth knowledge of tax systems. The purposes of the paper are to: (1) explain the current role of property taxes in financing government and how the current situation developed; (2) acquaint the reader with the general arguments for and against heavy reliance on property taxes in financing governments; (3) assess the concerns about property taxes that bring the idea of reducing them to the state policy agenda; (4) analyze the other concerns that have caused property taxes to continue to be a mainstay of state-local finance; (5) summarize what has been happening recently on this issue in the states; and (6) offer suggestions on appropriate state policies for dealing with property tax issues. The paper identifies six states that are the most serious candidates for property tax reform--Illinois, Iowa, Maine, Minnesota, Nebraska, and Wisconsin. Two conclusions follow from the state-by-state analysis. First, there are some good reasons why officials of most states are not cutting property taxes; and second, state officials should not worry much about missing out on a wave of state-financed property tax reductions sweeping the country. Four tables are included. Appendices contain a summary of interactions between business and property tax issues and suggestions for state decision makers who dislike taxes but recognize that maintaining approximately the current level of revenues is a necessary evil: defend local tax bases; dramatize your concern about proposals to create new loopholes by insisting on common-sense safeguards; do not get sucked into discussions of tax policy when the issue is spending; seize opportunities to broaden the tax base; and do not try for consensus if you really favor tax reform. Information about the Finance Project and its publications is included. (LMI)
Publication Type: Reports - Research; Information Analyses
Education Level: N/A
Authoring Institution: Finance Project, Washington, DC.