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- Will the tax base go up and down with the economy? <br /> o Property—typically the most stable. Property tax bases rarely go down <br /> o Sales — moves with the economy but is a generally "stable" tax base. <br /> o Land Transfer— heavily dependent on the health of real estate market. <br /> Statewide Trends — Deed Stamp (graph) <br /> Statewide Trends — Sales (graph) <br /> What Makes a Strong Real Estate Market <br /> - A strong real estate market means lots of sales <br /> o The price of houses does not drop very often <br /> o Housing sales, however, can and do drop a lot <br /> - Property Tax is dependent on housing prices but Land Transfer is dependent on <br /> housing sales <br /> - Housing Sales are determined by <br /> o Job Growth <br /> o Interest Rates <br /> o National Economy <br /> - Is there a Housing Bubble in North Carolina? <br /> Incidence <br /> - What groups are typically economic supporters or opponents of each? <br /> o Realtors/Homebuilders against Land Transfer <br /> o Large Retailers against Sales <br /> o Homeowners/Industry against Property <br /> - Small Economic Effect— Big Perceived Effect <br /> - Many Hands Make Light Work <br /> o Each additional dollar in tax puts more strain on a taxpayer than the last <br /> o Spreading taxes reduces the total economic burden <br /> Economic Growth: Will higher taxes slow the growth of your county <br /> - It depends <br /> o How high are taxes already? <br /> o What is the tax used for? <br /> o How does your county compete for jobs? <br /> - Bottom Line: Each individual tax tends to have a small effect, but lots of taxes that <br /> fall on a single industry can have a large effect <br /> Equity or "Fairness" <br /> - Horizontal Fairness <br /> o Similar taxpayers should pay similar taxes <br /> - Vertical Fairness <br /> o When possible, taxes should be based on "ability to pay" <br /> o Progressive taxes increase faster than income <br /> o Regressive taxes increase slower than income or not at all <br /> Equity <br /> - Sales Tax <br />