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A credit that glues folks in place who just sit on the stoop and drink all day, or busily run illegal home-based businesses with little reportable income, isn't much good to the community.

Make no mistake, Schedule H is not necessary for long-time senior citizens either. Property tax rises slowly, at a capped rate, for people who are already in their homes. Over time it catches up, but old folks are canny enough to understand that if they simply sell and move during every cyclic real-estate trough, thereby resetting the property tax to a low property value, they can avoid the high property taxes new residents pay.

So all in all, the property tax credit could be improved by requiring a minimum income, counting both reportable and illegal unreportable income. (That might sound difficult, but the same algorithm that comes up with real estate assessments can probably do it fairly enough to meet local standards.)

by Turnip on Jul 30, 2012 7:29 pm • link • report