Pressures are increasing for reforms in financing of local government services. At the local level, the property tax is a major source of concern. Two major charges leveled against the property tax are (1) that the property tax is regressive and (2) that financing local government services through the property tax leads to inequities in services received.
The charge that the property tax is regressive stems from the fact that it is a tax on wealth and not on income. The amount of real property owned by a person is not necessarily proportional to his ability to pay taxes. Several studies have shown that property taxes are regressive; i.e., that low-income families pay a greater percentage of their income for public services than do middle- and upper-income families.