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Property Tax: Assessment Problem

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Over the last few years, many people have experienced situations in which the property they purchased several years ago was assessed at a higher value than it would be in today's market. Often, when one tries to appeal the assessment, the board of assessors can actually rule that the assessed value is higher than the value at which the property was assessed when purchased. If someone was successful in an appeal, and was able to reduce the assessed value of the property, many of his or her neighbors would be upset because that could adversely affect their home values. Property taxes are a primary revenue stream for government.
Now that you have an appreciation for the government's need of property tax revenue, as well as an understanding of the taxpayers side, I need help answering the following questions:
- would you have a recommendation as to how the government could more equitably assess property taxes?
- Consider the best way your recommendation could be implemented, keeping in mind the government's need to plan for budgeting, and the best way to maintain the revenue streams.
- Discuss how the revenue stream may be made up if the revenues from property taxes have to be decreased. Do you think the government will increase the tax percentage or increase taxes in another area in order to compensate?

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In compliance with BrainMass rules this is not a hand in ready assignment but only guidance.

The problem is that the property prices have actually declined and those whose property has been assessed at higher prices want that the excess taxes should revert back to them. There are many properties whose prices have so declined that there is very little hope of property prices increasing in near future. In such situations it is equitable that the government should credit the excess tax paid by the tax payer. It is recommended that the government should appoint a panel of market agents who can speedily and accurately value the property at market rate (1). This will be the fair value of the property. Now the property has declined in value ...

Solution Summary

The answer to this problem explains how property tax should be treated equitably. The references related to the answer are also included.

See Also This Related BrainMass Solution

Data Analysis - Finding Sample Sizes for Confidence Intervals

Include a "summary statement" for each CI.

Elected officials in a small Florida town are preparing for the annual budget for their community. Specifically, they would like to estimate how much their constituents living in this town are typically paying each year in real estate taxes. Given that there are over 3000 homeowners in this small community, officials have decided to sample a representative subset of taxpayers and thoroughly study their tax payments. The latest frame of homeowners is given in the file P8_49.XLS.

Suppose that elected officials in this community would like to estimate the proportion of taxpayers whose annual real estate tax payments exceed $2.000.

PROBLEM: (part a, b only)

(a) What sample size would be required to generate a 99% confidence interval for the proportion with a half-length of 0.10? Assume for now that the relevant population proportion p is close to 0.50.

(b) Assume now that the officials discover old tax records that suggest that approximately 30% of all property owners in this community pay more than $2000 annually in real estate taxes. What sample size would now be required to generate a 99% confidence interval for this population with a half-length of 0.10?

CL 0.99 0.99
Z 2.5758 2.5758
p 0.5 0.3
B 0.1 0.1

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