Real property taxes tend to have significantly lower compliance cost per dollar of revenue raised than do individual income taxes because:
A) local governments administer property taxes.
B) real property taxes are taxpayer passive while income taxes are taxpayer active.
C) individual income taxes yield vastly more revenue than do real property taxes.
D) the statement is inaccurate: real property compliance costs are actually higher.

Question

Quizplus · Accepted Answer

Real property taxes are passive in the sense that the property owner does not actively participate in the tax collection process. The tax is simply assessed on the value of the property and the owner is responsible for paying it. This results in a lower compliance cost per dollar of revenue raised compared to individual income taxes, which require active participation and reporting by the taxpayer. Additionally, local governments typically administer property taxes, which may be more efficient and cost-effective than a federal or state income tax system.

Real Property Taxes Tend to Have Significantly Lower Compliance Cost