August 17, 2013 1 Comment
The Altoona Mirror reports that Altoona Pennsylvania adopts Land Value Tax, sadly the report headlines on confusion. Altoona property tax bills confuse property owners :
“City Council voted to adopt “land value tax” in 2002, on the urging of The Center for the Study of Economics in Philadelphia, whose president, Joshua Vincent, had made a presentation the year before.
Land value tax shifts the basis for property tax to assessed value of land and away from assessed value of buildings. It’s designed to encourage development and discourage speculative hoarding of ground.
While 16 cities and two school districts in Pennsylvania use land value tax, Altoona this year became the first municipality in the country to go as far as to rely on land value alone.
Council introduced the practice with a 20-percent shift toward taxing on land alone, followed by successive annual shifts of 10 percent, until the transformation was complete.
Because collective assessed value of land in the city is one-seventh as much as assessed value of land and buildings combined, the city had to increase millage by a factor of seven to generate the same revenue.
That land millage is now 369 mills.
Applied to the $24.59 million assessed value of land in the city, it generated $9 million for 2011, theoretically.
Because the new millage is seven times higher than the millage under the old system, individual property owners pay less if their land value is less than one-seventh of their total assessed value – the amount that was the basis for taxation under the old system.
Conversely, owners pay more if their land value is more than one-seventh of their total assessed value.”
H/T Matt Yglesias