Two cities are identical in all respects except City A has an assessment ratio of 100% and City B has an assessment ratio of 25%. Both cities need to raise $1,000,000 in property tax revenues. The statutory tax rates on property are:

Question

Quizplus · Accepted Answer

City B has a lower assessment ratio, meaning that the property values in City B are overvalued, resulting in a higher tax rate to raise the same amount of revenue as City A. Therefore, the statutory tax rate in City B is higher than City A.

Two Cities Are Identical in All Respects Except City a Has