Cutting Property Tax?

[enochs-fable.livejournal.com]

Deval Patrick wants to cut the property tax. Wouldn't that impact school funding, since that's where the money comes from? Can anybody cite sources in how that would work?

( if this is too off-topic, I apologize )

Comments

[agnosticoracle.livejournal.com]

Landlords can only charge what rent a tenant is willing to pay.

I don't disagree, it is more complex. There is an intermediate step. But a landlord needs to cover the cost of the mortgage and property tax on the house. Similarly if property tax did temporarily drive up the cost of home ownership vs renting, the ratio of people wanting to rent will go up. This increases the demand for apartments which increases rent. The amount passed is probably less 100%, I'm sure there are some economics papers on this somewhere if we wanted to look. But a good portion of it must be passed on.

When comparing income levels it might be useful to compare within the homeowner and renters groups than between them. That is compare the effect on a lower income family that owns a house to a high income family that own a house, and compare a lower income family that rents to a high income family that rents. What you will see within the groups is that the housing expense to income ratio is largest for lower income families in both groups. Since property taxes are generally a "flat rate" it means that the tax burden to income burden will be highest on lower income people in both groups.