Researcher says property taxes are progressive. I disagree (and I'm not the only one!).

This past Friday I attended the annual meeting of the Minnesota Taxpayers Association. They had a line-up of several speakers talking about hot topics in tax policy.

What I didn’t expect – and what I take issue with – was to hear a speaker pronounce that it is a “myth” that property taxes are regressive and, in fact, “property taxes are generally progressive.” This according to Daphne Kenyon of the Lincoln Institute on Land Policy – check out her report on funding education through property taxes. To review tax terms – a progressive tax means that as a person’s income goes up, a larger share of their income goes to paying the tax.

The assertion that the property tax is a progressive tax contradicts what I would consider to be an authorative source: our own Minnesota Department of Revenue. The DOR’s Tax Incidence Study has consistently shown that residential property taxes in Minnesota are not progressive. To quote their 2007 Tax Incidence Study study, “In the absence of property tax refunds, residential property taxes are more regressive than the sales tax.” And while property tax refunds help lessen the regressivity of the property tax – it’s still regressive.

Ironically, Kenyon went on to warn against replacing the property tax with the sales tax as a means to fund education. Why? Because the sales tax is very regressive. I agree – the sales tax is very regressive. I do not agree that the property tax is a progressive tax, and I’m pretty sure most Minnesotans (and researchers) would agree with me.

-Katherine Blauvelt

About Katherine Blauvelt

Katherine Blauvelt served as the Minnesota Budget Project’s policy analyst from 2007 to 2009.
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