Homework Lance
ADM 624 Week 8 dq 1
Property tax exemptions are meant in general to serve a valid public purpose such as provision of essential services whose importance outweigh the taxes that would have otherwise been collected from such ventures (Siegel, 1997). However, exemptions can adversely erode tax base and shift the tax burden to other property owners within the taxing district. Therefore, property tax exemptions can lead to unreasonably high taxes for the remaining segments of taxpayers. The tax exempt organizations include YMCA, chambers of commerce among others (Aaron, 1974).
There some charitable organizations that engage in income generating activities that should be subjected to taxation in order to promote equitable taxation. For instance, the YMCA has built provide other monetary services including outdoor swimming pool, volleyball and basketball courts, a community rooms, fitness center be exempt snack bar which are generating high returns annually for the organization (Aaron, 1974). These are services which are also provided by other non-tax exempt organizations. Therefore, such tax exempt should be lifted for the YMCA as they abuse such tax policies to unfairly generate more income at the expense of taxpayers (Siegel, 1997).
In conclusion, many private and for-profit corporations provide service for the benefit of the larger society but they still pay property tax or make a contribution in lieu of taxes. The economic policy makers should they revamp the tax system to ensure equity and fairness by both the charitable organizations and for-profit corporations (Aaron, 1974).
Reference
Aaron, H. (1974). A new view of property tax incidence. The American Economic Review, 64(2), 212-221.
Siegel, G. K. (1997). Weighing the costs and benefits of property tax exemption: Nonprofit organization land conservation. New York: Online Published.
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