Property tax is usually colleted from the all property owners wheather individuals or businesses.
The tax is usually based on the current value of the property and is typically a perentage on the
value of the property. The money colleted is ususaully spent on the school system in the
The money collected would be spent one way or the other wheather the county spends it or the
people who are paying if they weer not taxed. the diffrnece is that if the individuals or business
were not aaxed they wpoul spend the money differently than the county that tcollects it. If the
ocunty spends it then we have money going to the school distrcits and would result in products
that the public cannot spend their money on, meaning the schools and the school programs. So
this money is then withdrawn from the business circulaltion from the businessess and hene will
not be spent by the coresponding individuals and business for their busnesses. Hence their rate
of return on investments will be smaller than it would otherwise be he case. This then translates
into a slower growth rate for the entire eeonomy. It is clear that this wil happen and is
happening since a portion of the business profit is not going back into spending or investment
but insead tansformed into produts (schools and school servcies ) that the public cannot spend
their money on.The conractors that provide school services will have the money that was
colleted in taxes but the money did not tranform into spendable products and hence will be spent
on the remaining products. That will create a presuure on th remainig goods and sevices in the
market and will cause a price rise. This is true for all taxes. That is why you see the prices
consatanly under an upward pressure. In all counties there wil always be a pressure for the
prices to incease.
But the the rason we collect property taxes is to provide school sevices and you can see that
these services will not be provided by the private busineses and since we have to have
education, there has to be a way to divert funds fom businesses and individuals to provide
school sevices. But that is happening at the cost of a slower growth rate for the entire economy
. this is also the case with extensive outlays for defense and hence they too have a drag effet on
the economy since the public cannot spend the federal contract money on spendable goods and
servcies. This is because the contractors that get the defene money, cannot spend the money on
the defense goods produced like aircarft and aircarft carriers. Hence all defense spending will
also cause a drage on the economy and lead to a constant pressure on the prices to increase.
Now that we know how the taxes work we can reduce the effects of them to some extent. There
are many ways to do this but one may is doable with ease.
We can give businesses a tax holiday. This would be a periodic break in taxes. This will have a
beneficial effect as follws. The tax holiday in one form or another will boost the business profit
levels and hence their investment capabilites. The income levels wil increae everywhere. The
reaminaig taxes will be calculated at the higher income levels and hence will yield higher tax
colletion volume. Also the property tax hliday will boost the real estage business and lead to
higher property prices and hence a larger property tax yield after the tax holiday.
Tax holidays are essntial and are a powerful weapon to boost an economy. Indeed a property tax
reduction by 50 percent every 3 years can stabilize an eceonmy and is a quick way to bring about
prosperity for all.
It is not for nothing that each election year we have the candidates talkig about tax cuts.