With all-too-rare exceptions, property tax assessments systematically overvalue property in poor neighborhoods and undervalue property in rich ones:
Americans expect to pay property taxes at the same rates as their neighbors. But across most of the United States, flat-rate property taxation is a sham.
Local governments are failing at the basic task of accurately assessing property values, and there is a clear and striking pattern: More expensive properties are undervalued, while less expensive properties are overvalued. The result is that wealthy homeowners get a big tax break, while less affluent homeowners are paying a higher price for the same public services.
Homeowners have long complained about inequitable assessments, and past studies have documented problems in particular cities. A new nationwide analysis led by Christopher Berry of the University of Chicago reveals that the inequities in tax assessments are both very large and very common.
For example, in Cook County, Ill., which includes Chicago, 1,015 homes were sold for exactly $100,000 from 2007 to 2016. Their average assessed value before the sale was $151,585. During the same decade, 149 homes sold for exactly $1 million. Their average presale assessed value: $647,030.
These distortions in assessed values carry through directly to tax bills. Nationwide, from 2007 to 2016, homes in the bottom 10 percent of property values in a given county were taxed, on average, at an effective rate that was twice as high as the rate for homes in the top 10 percent of property values.
Definitely worth reading the whole reminder of how economic inequities compound themselves through political power.