States Faced with Surge of Property Tax Appeals Should Turn to "Circuit Breakers"

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The New York Times reports that many homeowners are appealing their property tax bills because their home values have dropped while their property taxes have actually increased. The article rightly concludes that these appeals can have a real impact on already struggling local governments. Jacqueline Byers from the National Association of Counties told the Times that 76 percent of large counties said that falling property tax revenue was significantly affecting their budgets.

Certainly it's a triple whammy to see your home's value fall while property taxes increase and incomes decline. The homeowner's predicament discussed in the article points directly to the inherent flaws in the property tax. Namely, property taxes aren't based on your ability to pay. If you lose your job or your investment income plummets, property tax bills are still due.

One way to ease the property tax burden for low and middle-income taxpayers is what is called a property tax "circuit breaker." The idea is simply to prevent the property tax bill from exceeding a certain percentage of the taxpayer's income. This property tax relief mechanism is one way to ensure that property taxes actually take into account a family's ability to pay. Read about the benefits of property tax circuit breakers ITEP's policy brief.

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