PRESIDENT'S MESSAGE

Concerns over property taxes in the USA continue. A lengthy recent article titled “Property-Tax Wars” sets out some of the issues. The article was written by Steven Malanga who is a senior fellow at the Manhattan Institute and a senior editor of City Journal. Here are some selected extracts from the article.

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“Early last December, homeowners in Cook County, Illinois, home to Chicago, received an unwelcome pre-Christmas jolt. In neighborhoods on the city’s South and West Sides, property-tax bills arrived just days before the first installment was due. In some areas, the average bill had nearly doubled.

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• Property taxes currently generate 70 percent of all local tax revenue, some or all of which would have to be replaced with other taxes under property tax repeal.
• Replacing the property tax with newly granted local taxing authority is exceedingly difficult, because local sales and income tax bases vary widely across jurisdictions; there may, for instance, be no feasible sales tax rate by which an agricultural county or bedroom community could replace its property tax revenue.
• Backfilling forgone local property tax revenue through new state taxes is difficult because it dramatically shifts overall tax burdens, undermines local accountability, and cannot easily adjust for changing population mixes.
• All revenue alternatives are less conducive to economic growth than the existing property tax regime, but some transfer regimes are sharply degrowth.