Chapter+4+HW+Solutions+to+Cases

Chapter+4+HW+Solutions+to+Cases - Chapter 4 HW Solutions to...

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Chapter 4 HW Solutions to Cases: 4-2 . This is a case for which there is no “right” answer. Rather students should be given credit for how well they identify, develop, and communicate pertinent issues, and on the quality of their analysis. a. The recent plunge in real estate values in some parts of the U.S. was preceded by a rapid increase in values in many of the same parts, which gave rise to this case. Seldom will political realities permit a government to raise taxes as rapidly as valuations rise, nor will they be quick to lower taxes when real estate values fall. In some states such as California, Massachusetts, and Missouri, there are constitutional limits on the amount of year-to-year growth that is allowed for tax revenues. In some states, property taxes predominantly support independent school districts, whose tax rates may be limited by state funding formulas for K-12 education. But even where constitutional and legislative limitations do not exist, not many legislative bodies would be willing to increase property taxes at the same rate property values are growing because of potential political backlash. Keep in mind that even if the tax rate is left unchanged, the tax levy
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Chapter+4+HW+Solutions+to+Cases - Chapter 4 HW Solutions to...

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