Pennsylvania should learn a lesson from its neighbors to the north.
From the article by Steve H. Hanke and Stephen J.K. Walters:
When every U.S. county is ranked according to its average property-tax bill as a percent of home values, nine of the worst 10 are in upstate New York.Read the full article at the newspaper's Web site.
All housing markets are local and local government policies can have an enormous impact on property values. Higher property tax rates, for example, inevitably send home values downward. Why? A $6,000 tax bill adds $500 to a monthly mortgage, and simultaneously reduces the amount a buyer would be willing or able to pay for a home. Cut the tax bill and you help struggling homeowners hold onto their houses. And lower taxes allow would-be buyers to spend more for homes.
High property taxes also discourage investment in new homes. Builders won't build where property taxes drive buyers away.
The problem of heavy property taxes crushing fragile upstate economies has not gone unnoticed, just unsolved. A special Commission on Property Tax Relief, supported by Democrat Gov. David Paterson, recommended in August that local property tax increases be capped at 4% annually or 1.2 times the inflation rate -- whichever is less.
That wouldn't have cut taxes, but it would have moved New York toward a less oppressive tax system. And for a moment, it seemed that the idea might even take off when the state Senate passed a tax-cap bill earlier this year. But the state Assembly voted instead to raise marginal tax rates on incomes above $1 million and use the proceeds to pay for property tax relief for low-income homeowners. That standoff all but killed tax reform.
Did you catch the part about how property taxes can add up to $500 on monthly mortgage payments? Looking for a way to stimulate the housing market and rebuild the economy? Eliminate property taxes!!!
To learn more about efforts to eliminate property taxes in Pennsylvania, check out the Web site of the Pennsylvania Taxpayers Cyber Coalition.
Originally posted at TONY PHYRILLAS
