Final answer:
Property taxes are taxes imposed on assets, such as homes, land, and businesses. They are collected by local governments and based on the value of real estate. Property tax can vary and some properties may be tax-exempt, leading to disparities in amounts paid by neighbors.
Step-by-step explanation:
Property taxes are taxes imposed on assets, such as homes, land, and businesses. The value of the property is determined by a government official, and a proportional tax rate is applied. Property taxes are collected by local governments to raise revenue and are based on the value of real estate held by individuals or corporations.
One drawback to the reliance on property taxes is that property values can vary with the economic health of an area, the quality of school districts, and overall desirability. Additionally, significant parcels of land, like those occupied by colleges or churches, may be tax-exempt. Some states have also placed limits on regional governments' ability to raise property taxes.
Overall, property taxes are an example of a local tax and are considered progressive since property ownership tends to be concentrated among higher income groups.