Outlook: Property Taxes

It happens around this time every year. Property tax assessments go out around the area, and homeowners who've been gleefully watching their housing values skyrocket for months suddenly come crashing down to earth. Depression hits, as all at once everyone realizes that... the dreaded property tax will have to be paid. But all the whining and grumbling is misplaced and misguided, argues property tax expert David Brunori in his Sunday Outlook piece, Assess This. Much-maligned though it is, the property tax is actually the ideal way for local government to raise money to fund public services. So if your trash gets picked up, your potholes get filled and you like your public schools, stop complaining -- and pay your property tax.

Brunori, contributing editor of State Tax Notes magazine and a research professor of public policy at George Washington University, was online Monday, Feb. 14, at 2 p.m. ET to discuss property tax assessments.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

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Laurel, Md.: This may seem a little rambling, but it's that's concerned my for a while and related to the issue of property taxes.

When someone buys a home in a particular community, they also become a voter in it. One of the things local voters do is protect the value of their investment by limiting the amount of new housing that can be built.

Local politicians figured out a long time ago that since local government income is proportional to property values and service demands are proportional to population, the best way to balance a budget is to keep properties large and population density small. So both grass-roots voters and politicians have an interest in making sure "no one poorer than me" lives in my community.

Although property taxes WITHIN ANY ONE JURISDICTION may be a fair way to pay for services, doesn't zoning segregate communities by income to re-stratify the price of services available?

David Brunori: Yes. residents will try to protect the wealth of their communities by restricting access. But they will do that with or without a strong property tax.

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Washington, D.C.: I'm sick of people carping about their higher property tax bill; as you note, this came about because their net worth increased by a far larger amount. I moved to Washington five years, ago, fresh out of college. I looked into buying a one-bedroom condo then, but found that at $180K or so, they were priced just out of reach. My career has gone well, and I've gotten a raise every year, but a one-bedroom place ($350K in today's market) is further out of reach today than it was the day I moved here.

So yes, I am sooooo sad for the poor people who were able to buy five years ago and have an extra $170K in net worth. How dare the government expect them to kick in an extra couple thousand dollars a year; how lucky am I that I have no such burden to shoulder.

And a question: Can this possibly be sustainable? Are we not due for a correction in this market? If no one can afford a place except by zero-money down, interest-only mortgages, isn't it a sign of prices that exceed a sustainable equilibrium?

David Brunori: Over the long run, real estate prices go up. There are dips, but they go up. So things will only get more expensive.

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Arlington, Va.: In your article, you do concede that rising property taxes are hard on people with fixed or low incomes. However, you do not address a problem reported in another article in the Outlook section, viz: the enormous rise in housing prices and resulting property taxes are making it impossible for the backbone of our community -- police, firefighters, teachers, and others in retail and service work -- to live and work around here. At this rate, Arlington is going to be full of starter castles with two-lawyer incomes and nobody to collect their trash. I exaggerate, but you understand what I'm saying.

David Brunori: The problem you describe is attributable to the fact that wealthy people want to live in the area. It has nothing to do with property taxes. And yes, it presents a serious problem with respect to the backbone of the community. But it has nothing to do with property taxes.

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Redford, Mich.: In Michigan at the time of sale of a residential property the property is re-assessed and the taxes generally go up and not just a little bit.

Often a homeowner finds that the new tax payment would, in all likelyhood, stop them from quaifying for the current mortgage.

Why is this permitted by the states? Shouldn't there be something to inform the buyer of the tax increase, even if all it is is an estimate made by the realtor?

David Brunori: I think that if a realtor knows that property will be assessed higher, they should inform prospective buyers. You would think the mortgage banks would want you to know.

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Arlington, Va.: David,

Did you look into Arlington's tax situation at all? In Arlington, Va., trash collection is billed separately. The schools are overcrowded. They do a poor job plowing the roads.

However, they send out the tax bills very reliably.

David Brunori: That is a political issue. If you are unhappy with the services you receive, blame your politicians and not the property tax. If enough people complain, they will listen.

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Washington, D.C.: Do you think there is a "bubble" as far as rising values goes? If there is, how much longer can one expect homes to keep rising. Demand is high, but slowly rates are rising, and houses are becoming too expensive. What can be expected in the next five to 10 years?

David Brunori: I don't know. Over time, property values increase. There are dips but if you plot it over 20 or 50 years it always goes up.

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Laurel, Md.: What happened throughout the 90s when home values didn't rise much? Did local governments suffer, or did they get by with population increases or increases in revenue from other streams (e.g. sales, income taxes)?

David Brunori: Across the country, many local governments were forced to raise rates during times when property taxes are not increasing. But that is rare. In most states, there is not much reliance on sales and income taxes.

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Bethesda, Md.: I agree with most of what you wrote -- considering where I live, it would be peculiar if I didn't. But it seem to me that the current rise in property values is losing touch with reality -- I think we need to make sure that local governments don't treat the sharp rise in assessments as an opportunity to do all that stuff on the "we would do it if we had the money" list.

David Brunori: That is a political issue -- not a tax issue. you can demand more or less government. If your political leaders are not listening -- vote them out.

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Del Ray, Alexandria, Va.: I agreed with everything you had to say about property taxes, but the one thing I think needs more emphasis is the element of local control. It is my understanding that about one third of all the income tax monies paid in Northern Virginia go to Richmond and never come back. The state government jealously guards its power and rarely does it cede any to localities. Any funding stream which is all raised and spent locally is a good thing for the very reason that protest is a local phone call or a short drive away and the officials receiving that protest are answerable to the local citizenry, not constituents in Radford or Orange, Bluemont or Norfolk.

David Brunori: I agree wholeheartedly. The property tax is the key to local control.

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St. Mary's County, Md.: Our county commissioners have proposed capping property taxes for homeowners age 70 and older. The stated goal of the proposal would be to help low-income seniors. But since all seniors would benefit, the proposal has an obvious political objective.

The seniors in St. Mary's have told the commissioners that they don't want any income testing as part of the program. That's understandable. Still, I don't think wealthy seniors should receive this kind of benefit. Younger homeowners, especially first-time home buyers, are just as impacted by the rising property assessments.

I think a better idea would be to establish a deduction of $50K to $75K on the assessed value of the home before calculating the property tax. (This would apply only to owner-occupied homes.) Of course, the tax rate would have to be raised to maintain the same level of revenue. But this would shift some of the tax burden to people who own large, expensive homes.

David Brunori: Personally, I would give seniors a break but tie it to income limits. There is no reason really rich folks should get a tax break -- no matter their age. Widespread homestead exemptions are costly to government. Targeted exemptions based on income are more effective and efficient.

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Arlington, Va.: I'm sure you'll be getting lots of comments and questions. I live in Ballston and the value of my condo has tripled in the last eight years. My assessment was up over 30 percent this year following a similar increase last year. In my opinion these high assessments only favor people who are looking to sell. I certainly don't mind paying taxes for the many reasons you listed. However, are the county's costs really increasing at over 20 percent per year as assessments are? If the rate remains unchanged I will be paying a 30 percent tax increase this year. That is awfully steep. I can afford to pay it, but I wonder about the folks who had to really stretch to be able to afford a home in the first place with the ever skyrocketing home prices. Then they get whacked with a big tax increase. How much longer can these increases be sustained? Who are these people buying the $600,000+ homes and where is the money coming from? There can't be that many rich lawyers and lobbyists out there.

David Brunori: That is why residents must demand that political leaders reduce the rate during times of high property inflation. But the problem of rising values is a function of people wanting to live here.

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Potomac, Md.: Can you tell me if there is a correlation between the tax cuts initiated by the Bush Administration and the current spikes in property taxes? It appears to me that if States receieve less money from the federal government to finance capital projects, education, etc., then states and local jurisdictions raise taxes to make up for the shortfall.

David Brunori: No. While the Bush Administration's budget hurts local governments, the real problem is rising property values. Now if local governments received more money from the state and feds, they might be willing to cut rates.

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Vienna, Va.: While I agree that propery taxes are a good tax, I disagree that rising property values are "a good thing." Housing is not an investment like investing in the stock market. Everyone needs a place to call home, not everyone needs to invest in the stock market. Housing inflation is a huge problem, isn't it?

David Brunori: Housing inflation is a problem, unless you are a homeowner. If you have a house that has appreciated in value, you can sell it at a big profit, borrow against it, or leave valuable commodity to your loved ones. These are all good things.

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Laurel, Md.: One problem with property taxes which I believe you glossed over are the fact that they are fungible. Sure, the "rate" is written in stone and is uniform, but the rate is only based on an assessment which is, at least in some cases, wildly inaccurate. The home my roommate bought in 2001 for less than $300K was immediately assessed for $425k. Market forces thus proved the assessment was phony.

I was hoping your article would contain some figures for the "cost of compliance" which could tell us what percentage of this revenue stream ends up in government coffers. My understanding is that residents in my county can always contest their assessments free of charge. Clearly that carries a significant bottom-line cost to the government.

What would you think of a uniform tax rate per ACRE of lot and/or building space?

David Brunori: A tax on land is a very effective way of raising revenue. A tax on building space is not. Believe it or not, the assessment system is pretty accurate.

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Silver Spring, Md.: We purchased a home in Silver Spring last spring, selling our home of 20 years in Virginia Beach. We sold our 1983 $111,000 home for $286,000, which in that area/market we were pleased with. The family that bought our home sold it after nine months for $45,000 more. The market had turned with very high increases over a very short time. Our new home here is increasing too c(not at that level) but we can't keep looking back. We all have "what if " stories. I think we need to assess what we are getting for our property tax dollar in services and also we have to be happy with where we are. The people really in trouble are those not in the market yet. Thanks.

David Brunori: I agree. If you are not in the market in this area, you will be forced to buy where land is cheaper. But that is not a problem withe property tax. It is a result of people wanting to live here.

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Annapolis, Md.: How appropriate that the article "Burned by the Boom in N.Va. Real Estate" appears on the same day as David Brunori's online discussion about property taxes (and a day after his Sunday Outlook article "Assess This").

What do you say to Kesha James? Should she have to face higher taxes or not? If the answer is no -- then can I get her deal? I wouldn't complain, I would count myself lucky to have a house - a house built by the generosity of others.

David Brunori: I think the government should do all they can to help Kesha and those like her. The Commonwealth of Virginia can offer all kinds of tax relief -- and should.

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Yellow Springs, Ohio: I'm a student at a small midwestern college. I agree with your idea that property taxes increase property values by providing adequate local services. Some may argue, however, that this view is utopian -- that it depends on a local government with some sort of integrity. For example, the property assessments in Washington, D.C., are sky-high, but the services are sub-par.

David Brunori: Yes, there are times that the property tax burdens do not match the services provided. But that is a political problem. You mentioned DC. There was a time when public services were horrible. THere are still some problems, but things are much better with a different administration.

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Arlington, Va.: I enjoyed the article -- it was thoughtful and provocative. But with all due respect, you seem like a wealthy individual -- or at least someone for whom paying your property taxes is no hardship. Some of us are less fortunate.

David Brunori: On the contrary. I am not wealthy in the sense that paying property taxes is no big deal. No one likes paying taxes. But if one thinks about what we are getting in return (in my case excellent schools), it does not seem so bad.

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Arlington, Va.: It's about time people who complain about property taxes were said to be "whining." The real issue isn't the supposed high level of property taxes, it's making sure that people on fixed and lower incomes obtain relief where it's fair. In other words, expand on programs that exist in places like Arlington County. Beyond that, I'll gladly take what I pay for, and God forbid if Republicans get in here and ruin everything (as they always do).

David Brunori: I agree. The goal with respect to property taxes should be to provide relief to those who need it.

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Washington, D.C.: You make the case that property taxes are worth the benefits we get in education and police. But how do you justify this on a per-property basis? Why should the owner of a higher-valued property pay more than his share of taxes compared to that of a lower-valued property, when they receive identical services. Shouldn't taxes be based on ability to pay, not on the fortuity of whether one's home went up in value on paper?

David Brunori: The property tax and the property are closely intertwined. The services that your property taxes pay for increase the value of your property. Thus there is a connection between the two. Public finance economists have long recognized that ability to pay taxes are inefficient for funding local services.

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Alexandria, Va.: I am just nauseous about all the screaming re the assessment increases in Alexandria:

1. Existing homeowners will see a true windfall when they sell;

2. Actual levies will not skyrocket -- actual levies are likely to barely inch up, because as assessments go up, the actual tax rate per $100 of value goes down proportionately;

3. The place to complain if there ever were windfall-tax-hikes at the local level is Richmond -- the State legislature demanded that the car tax be reduced quite avulsively, and now local governments have no real option but to tax real estate;

4. Alexandria, like most D.C.-area local governments, is exceptionally cheap given the quality of most of the services - take a look at the teeny-weeny local government salaries (they're all up on the web). Doctors, lawyers, and other white-collar employees in DC-area local governments can barely make their student loan payments and are usually paid less than police and fire personnel; and

5. Take a look at real-estate assessments, tax rates, and actual bills anywhere in the northeast or California -- they normally run two to three times higher than any such rates in Metro D.C. for precisely comparably market-valued property. In Alexandria, for example, a $500,000 house is most likely valued at about $450,000, and this year will be taxed at about $4,410. In Monmouth County, N.J., a $500,000 house will be valued at up to $600,000, and taxed at about $11,400. And in most of those localities, the schools are even worse than ours, and there is literally no public transit whatsoever!

QUIT COMPLAINING!

David Brunori: I could not have said it better.

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Washington, D.C. (Capitol Hill): My problem isn't with the existence of the property tax - I think it's actually a reasonable way to tax citizenry, as you point out. My problem is that my property tax has tripled in the past five years. My business is rental property, so I'm getting hit very hard here. My holdings are long-term, so any gain I have is on paper for the foreseeable future. Yet, my actual real tax has tripled (yes, technically the city put in percentage caps, but within a few years it will have tripled in reality). I'm certainly not getting any better city services for it. Citizens would never put up with a tripling of the state or D.C. income tax in five years. Why should we put up with a tripling of the real estate tax? At this rate, it's actually considerably more tax than the local income tax for many of us.

David Brunori: You don't have to put up with it. Call Mayor Williams and the council and demand they lower the rates!

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Waltham, Mass.: To what extent are rising property taxes the fault of cutbacks in local funding, either from the states or the federal government?

David Brunori: The rising property taxes are primarily the result of increased real estate values -- and not the actions of the state or federal governments. However, if the states and feds gave more aid, local governments might be able to provide more relief.

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Fairfax City, Va.: How much has the boom in Real Estate values lifted the overall Tax burden on individual homeowners? (Over the past 6-8 years salary increases and percentage return on investments have not come even close to the rise in Assesment values.)

David Brunori: I do not know. But there must be a lot of wealthy people pushing those prices higher.

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Brandermill, Va.: Mr. Brunori, you wrote: "We all want well-staffed police and fire departments, well-paved roads, regular trash collection and, above all, good schools. The property tax is the one tax that provides a stable, continuous stream of revenue to localities to ensure that these services are adequately funded."

When property values are skyrocketing, as they are now, the property tax is hardly a "stable" revenue stream for localities -- it is a windfall. Are we getting more services for this extra money? Where is that extra money going and what happens if it dries up?

David Brunori: If you are paying more in taxes (any kind of taxes) than you are getting back from your government, the answer is to cut taxes, preferably rates. Most of us like the level of services we get.

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Annandale, Va.: The property tax has increased so much in Fairfax county in the past few years. However, I see more trailers used as classrooms in our elementary school. The transportation problem didn't imporve. Where did all the money go?

David Brunori: That is something you should ask the fairfax county public school system. I do not know. Personally, I think the increased use of trailers is awful.

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Arlington, Va.: I appreciate that we should all be pleased that our home values are increasing; mine has apparently increased 35 percent in the past year. However, the implication in this chat's description that we should all suck it up and be happy is just wrong. I have nothing against paying property taxes, per se, and I doubt that many of us don't see the value and purpose. What frustrates me is the dramatic rise in my tax bill in one year. Am I producing 35 percent more trash than I did last year? Did the student population in our schools rise by 35 percent? Are there 35 percent more potholes? "No" to all of these. Although Arlington has not yest determined this year's tax rate, I do not forsee a significant drop, by which I mean at least 20 percentage points to make up for the dramatic tax increase. Instead, I expect to hear the Board members discuss all their wonderful ideas for spending billions of additional dollars this year. The increase in property values should not be used to justify massive government spending increases.

And, by the way, none of this speaks to the even greater issue of people literally being forced out of their homes due to their inability to pay for unexpectedly rapid tax increases.

David Brunori: Very few people are forced out of their homes for tax reasons. Your frustration is shared by many. But the answer is to get your political leaders to lower the rates.

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Alexandria, Va.: I'm with you as far as property taxes being the proper way to fund services. My fear is this -- in facy does what goes up have to come down? What is the liklihood that home values will plummet?

I know you don't have a crystal ball, but are there any historical trends here that suggest we are are either okay or doomed?

David Brunori: In the long run, property values go up. They always have and barrring a freak occurance, they always will.

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Arlington, Va.: Property taxes go to pay for supplies and services needed to run a government, right? If so, why aren't taxes tied to regular old price inflation -- the cost of goods and services? Why are the increases tied to the increase in property values (something that more closely resembles a stock market these days as buyers speculate wildly). What's wrong with bumping up the rate by an inflation-based 2-4 percent each year? Do the costs to run a government increase by 20 percent just because home values increase by that much?

David Brunori: There are times when you may want to spend more than inflation. Rate limitations prevent that. The answer when property values are rising is to lower the rate.

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Washington, D.C.: I'm confused by your apparent inconsistency. You argue in favor of a real property taxation system which inherently means that tax burdens and revenues can rise substantially in a short period of time. But today you say that if taxes rise too much that people should get elected officials to lower the taxes. Why not just have a tax system that works to begin with?

David Brunori: Sorry for your confusion. The property tax is a good stable source of revenue that grows over time. If it is growing too fast (i.e., you don't want what your government is buying)citizens have the power to demand lower rates.

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Alexandria, Va.: Prof Brunori,

First of all, I took your State & Local Tax course last year at GW Law, and I must say that I found it quite stimulating and very relevant.

Do you find that high property tax assessments and/or rates act as a "check" against the local real estate market getting even hotter? I would think that high property taxes discourage some people from entering the market (unfortunately, they drive out people we want in the market, such as teachers), driving up prices even more?

Also, what do you think about a state adopting a progressive property tax system (charging a higher tax rate for properties assessed over $500K, for example?)

David Brunori: You must have received an A. Good question. Property taxes tend to be capitalized into property values. The taxes reduce values -- but the services provided increase values. Progressive property taxes are not a very efficient way of raising revenue. The ideal is a broad base -- tax all property at low rates.

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Kingstowne, Va.: We all like to complain about taxes, but one thing for people to consider is that at least the real estate tax is deductible on your federal return. If I have to pay a tax, I'd much rather pay something deductible than something for which I get no return, so in the scheme of things, I'd rather see my property tax bill increase than see increases in the cell phone tax, or the various utility taxes, or the gas tax...

David Brunori: The property tax provides a tax deduction, but only for those who itemize on their federal returns. That is a relatively small percentage of people.

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Washington, D.C. : Does the long-term, positive trend for real estate prices exhibit a strong positive correlatation with long-term wage growth? If no, shouldn't it?

David Brunori: I do not know about the correlation. But it seems like it should.

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Branson, Mo.: I'm a midwestern housewife. I got six kids to feed and a husband whose been out of work for two years. All we have is this house, which is an old farmhouse but we keep it tidy. Last year a McMansion development went in across the road and raised our assessment by half. It's not fair. They'll just force us to move.

David Brunori: Dear Branson,

I do not know much about your area or the property values. If your assessment is going up, that means your net worth is going up. You can sell your farm for a profit, or borrow against it. The fact that your husband is out of work shows the need to provide property tax relief to low income families.

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Fairfax, Va.: I bought my townhouse for $160,000 in 1989. Now it's worth $300,000. Trouble is,if I sold it, I couldn't find another home within commuting distance of my job that I could afford, even with that big gain.

My property taxes go up, but I still get the same amount of trash picked up as I did when my house was worth what I paid for it.

David Brunori: Actually, in Fairfax County we are not even paying for trash removal with our property taxes. The truth is however that the costs of government like everything goes up. Our teachers, police officers, etc. need and deserve decent pay increases. That is the bulk of the costs.

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Frederick, Md.: Cities and counties in our area that use the property tax system have a practically guaranteed 10 percent yearly revenue increase built into their systems, yet for the most part they complain about not having enough funds. So, (1) how can their costs of operation in genearl exceed a growth rate of 10 percent/year and (2) should they not be able to lower the tax rate (as opposed to rasing it as they have done in the City of Frederick!) to stay with a stable-income + inflation model of expenditures?

David Brunori: Yes, all local governments have the power to lower tax rates and they should if the amount of revenue coming in exceeds the costs of public services.

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Washington, D.C.: Your main argument seems to be revenue stability in comparison to the income tax, which can fluctuate downward if incomes go down. So obviously you're effectively advocating charging equal (or higher) property taxes when incomes have declined, making it harder to pay, unless one liquidates their family home. How do you justify that?

David Brunori: Very very few people liquidate their homes to pay property taxes. I am all for providing tax relief to those who truly need it (low income and those on fixed income).

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Arlington, VA: David,

Your article ingnored two important issues with property taxes.
1st Rising property taxes affect renters too since the tax increase is passed along in rent increases.
2nd, the biggest complaint w/ property tax is the double digit increases for the past 5 years or more. It's not just the tax, it's the rate of increase, and spending. Most wages don't keep up, unless you work for the county.

David Brunori: The folks who work for county governments are hardly over paid. Yes, the property tax is passed on to some extent to renters. And that is a problem, particularly for low income renters.

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Arlington, Va. : I'm not sure I understand the point of your article. You ably defended property taxes in the abstract, but relatively few people are talking about abolishing the property tax. Instead, most homeowners tend to be complaining about the rapid rate of increase in their property tax bills recently, due to sharply higher assessments, which your article only addresses in a throwaway line at the end ("go ask for lower rates").

To put it another way, your point that property taxes fund good schools, etc., is perfectly defensible, but largely beside the point. Our property assessments are 70 percent higher than they were five years ago, and I don't think anyone can really say that our schools are 70 percent better than they were back then.

Certainly, I don't think property taxes need to be abolished, but at some point, enough is enough.

David Brunori: I should have made the "throwaway line" more pronounced. If we are raising too much revenue -- i.e., it exceed what we demand in services, by all means we should demand rate cuts. But that is true with every level of government and with every tax. My point is that most of us are not unhappy with the level of service we are getting.

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Arlington, Va.: I'm surprised that you say only a small percentage of people itemize deductions on their taxes. It seems to me that anyone who owns a home ought to be itemizing. It reduces my taxable income by an enormous amount, and I suspect that it must for most people. Or am I worng about that?

David Brunori: I may be off by a couple of percentages, but only about 30 percent of all income tax filers itemize. It has hovered around that percentage for decades.

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RE: Arlington: "Am I producing 35 percent more trash than I did last year?"

Probably not, cost of trucks, gas, salaries, food, waste mgmnt, benefits etc. increased.

"Did the student population in our schools rise by 35 percent?"

Same answer.

Are there 35 percent more potholes? "No" to all of these."

Same answer. Asphalt is petroleum-based

Simple Answer: Commodity Prices have increased dramatically. Everything we do, build, drive, eat etc. has skyrocketed.

David Brunori: I agree wholeheartedly.

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Harrisburg, Pa.: What do you have to say about a spiraling system where communities with lower property values must have a tax rate twice as high as wealthy communities in the same state or even the same county as we have in Pennsylvania? How is that an equitable system of school finance where the state constiution demands equitity among the 501 school districts yet does nothing to ensure it? It seems that some districts could have a 90% tax rate and never generate the revenue they need to compete (local taxes are now, on average, 67 percent of financial sources of school budgets in Pennsylvania). Don't property taxes just give local politicians an easy way out instead of having to truly solve the problem?

David Brunori: You hit on an age old problem that is often blamed on the property tax. Rich communities can have lower effective rates than poor communities. But that is a function of the real estate markets. The problems in poor inner cities for instance have little to do with property taxes and a lot to do with crime, unemployment, blight, and despair.

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Kingstowne, Va.: Following up on my earlier point about real estate tax being deductible: Your point about people who itemize being a smaller pool of taxpayers is fair, but I would wager that the average D.C.-area homeowner who pays real estate tax, car tax (at least in Virginia), state income tax, and mortgage interest will be itemizing -- even by virtue of just the real estate tax and the mortgage interest, which combined ought to allow the itemized deductions to exceed the standard deduction.

David Brunori: Yes, I suspect that the number of itemizers in the metro area is much higher than the national average. That provides benefits to property owners (through lower federal taxes) and subsidizes local governments.

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Manassas Park, Va.: Why should the "deferral" program for the elderly be limited to them? Why not defer any property tax increases due to rising assessments above a certain percentage, say the rate of inflation or the CPI? The services provided by localities aren't rising at the rate of assessments.

David Brunori: The deferral programs are designed to help elderly people who are presumably on fixed incomes. They are not really designed to help everyone.

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Washington, D.C.: The real problem with property taxes, and one you fail to mention, is that they exacerbate economic disparity and opportunity in this country, particularly in that schools are mainly funded from the property tax. For example, a district with low property values, has to tax the people who live there (who tend to be poorer generally) at a higher rate in order to generate the same revenue per capita than a district with high property values. So, the rich district could actually have both lower tax rates and better funded schools, merely by being separate from where the poor live. That's not fair, and damages our country in the long run.

David Brunori: Don't blame the inequities on school performance on property taxes alone. Richer communities have better schools and can spend more. That is why people move to Fairfax or Montgomery counties and push prices up which increase property taxes. The answer is not to limit property taxes for schools (that hurts the wealthy communities) but for the state and federal governments to put more money into poor schools.

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Boston, Mass.: Another apologist for taxes. Funny, the Boston Globe ran a similar article a couple of Sunday's ago about how we should all be happy about taxes, because we get this and this and this and that. I'd like a line-item veto for not having to pay taxes for services I do not use.

David Brunori: That line item veto thing does not work well in a democracy. Our local taxes go for 1 schools, 2, public safety, and 3 transportation. These are hardly luxuries. I am no apologist. I actually don't like paying taxes.

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Mt. Pleasant, Washington, D.C.: My question is on tax assessment economics:

Houses are assessed based on recent sales, which is typically a small portion of total houses in an area. Those recent sales generate values applied to all houses. If, however, all houses in an area were on the market simoultaneously, the supply would increase and prices would drop.

So, shouldn't the assessments based on recent sales be heavily discounted due to the low number of recent sales?

David Brunori: Remember virtually every state discounts property values by some legislatively determined ratio. Very few of us pay tax on the "market value."

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Alexandria, Va.: As you have suggested, deferring property tax collection on the homes of our elderly can help alleviate the tax burden on those with fixed incomes. However, this is not always politically viable... who are the vocal opponents of this and why?

David Brunori: People oppose it because they don't understand it. Some people oppose it because it puts a lien on the property. And some people do not like the fact that the government does not get to collect as much revenue.

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Fairfax, Va: Mr. Brunori,

I'm confused. I thought my state and federal taxes pay for fixing my roads and related transportation services? Why does my property tax pay for this?

David Brunori: Actually, many local road repairs are paid for my local governments out of property tax revenue.

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Clifton, Va.: Since a significant portion of my property tax dollars go to the Fairfax County Public Schools I find it only fair to ask for annual or biannual audits of their budget and policies etc by an indepenendent audit firm. Fat chance of this ever happening. There have to be some cost savings and fat in the budget. A 5 percent cut would test this theory. Actually this audit should be extended to all Fairfax County agencies.

I adovocate secession from the rest of state.
Subsidizing the rest of Virginia is not my goal with my tax dollars. Last year Fairfax County residents got back less a quarter for every tax dollar we sent to Richmond. 50cents of each my tax dollars should come home to Fairfax County.

David Brunori: I actually think audits are a good thing.
As for succession, I am not sure the folks in Richmond will let that happen.

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