Final answer:
Taxing entities use the equalization process to smooth out wide discrepancies of assessed values within the district, aiming for economic equity and fairness in property taxation.
Step-by-step explanation:
As part of the assessment process, taxing entities sometimes use an equalization process to smooth out wide discrepancies of assessed values within the district. The goal of equalization is to ensure fairness in property taxation, given the variability in property values which can be influenced by factors like the economic health of an area, the school district quality, and state or municipality desirability. Moreover, the presence of tax-exempt properties, such as those owned by colleges and churches, presents additional challenges for cities in maintaining equitable taxation, as seen in cities like Boston where a significant portion of property is tax-exempt.
Property taxes are based on the developed values of real estate and can be seen as progressive, as they tend to be more concentrated among higher income groups. To maintain economic equity, governments aim for a fair distribution of tax burdens and may redistribute wealth through social welfare programs to aid lower-income families. The principle of equity in taxation is also aligned with the goal of equalizing assessed property values to address the disparities that arise from factors like legal limits on property tax increases, which started with California's Proposition 13.