Property Taxes Are Regressive or Term Paper

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,….....