Question

Thalia recently purchased a home. Prior to finalizing the deal, her city government appraised the value of the home and determined the tax she will pay. This tax will be used by local governments and school districts. This tax is known as ______.

Answer 1

The tax imposed on Thalia's home by her city government is known as property tax, which is a major source of revenue for local services and is based on the home's appraised value.

Step-by-step explanation:

The tax Thalia is expected to pay on her new home is known as property tax. This is a type of local tax imposed by municipal governments and is based on the appraised value of the real estate, which includes homes, land, and in some cases, personal business property.

The tax rate applied is proportional to this value. The revenue from property taxes is predominantly used to finance local services, such as local government activities, public schools, and infrastructure maintenance.

Property taxes are considered progressive as they are more likely to be concentrated among higher income groups who are more likely to own property. Economists view them as important sources of revenue for local governments, although they can be unpopular due to their visibility and the large lump sum payments required.