![]() Some excise taxes – so-called "sin taxes" – are imposed on goods deemed bad for society. Is the logic sound? Do people who use a lot of gas necessarily benefit the most from the highway system? For example, the federal tax on gasoline raises money that is earmarked for highway construction. Often the commodity taxed is linked to the intended purpose of the revenue collected. But capping property taxes tends to lead to holes in state budgets, forcing them to find other sources of revenue in sales taxes, income taxes, and so on.Įxcise taxes are imposed on specific goods. ![]() ![]() What if a person buys a home, only to have its value appreciate dramatically, causing her property tax bill to rise just as quickly? What if she's retired and can't afford the new tax bills? Should she be forced to move out of her home? That exact scenario has led many states to pass property tax limitation laws (California's Prop 13 is probably the most famous). Is this still true? Does the size of a person’s home or the amount of acreage that they own necessarily correspond with their wealth and ability to pay? They are one of the oldest forms of taxation, rooted in the belief that property values correspond to a person’s overall wealth and ability to pay. Property taxes are based on the assessed value of a person’s property. How do other taxes measure up against the three criteria of effectiveness, efficiency, and fairness? Sales taxes are not the only controversial forms of taxation.
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