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I wish you had asked this as a discussion question, particularly where you are seeking opinions. Everyone has different feelings about taxes; most people understand that they are a necessary evil, but who and what is taxed is quite a controversial topic.
Additionally, property tax reform means a lot of different things, depending on where the property is located. For instance, I live in a rural area in New England, where property tax is a major force in driving small family farms out of business. The issue in this case is that the land is appraised for its "highest and best use", which in most cases means what it would be worth as house lots; hence the farmer's land is being valued in a way that is incompatible with the way he is using it.
Another controversy is in perception of value. If structures were valued strictly based on square foot construction costs, that would be much more fair. Trying to place a value on an intangible like a pretty view is very subjective. I have heard of cases where someones property value and their tax bill rose dramatically because their neighbor cut some trees and suddenly they had a view that was not there before. Such examples make it plain why many people feel that property taxes need to be reformed.
I agree with you that the process needs to begin with legal policy, but I don't know how that will happen. Every state in the US handles property tax differently. In my state it's entirely up to the towns to evaluate properties and collect the taxes, and then pass a portion on to the state's coffers. While the state sets some guidelines for the process, it's highly individualized, particularly when it comes to property values.
Property tax is one of the most important sources of revenue for any country in the world. This has to be dealt very carefully as there are a lot of problems due to inadequate policies, inefficient administration and legal problems.
Reformation in property tax will definitely help to rationalize the tax system that is currently in use and also will definitely increase the revenues for the government.
The reformation has to start from legal policies.
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