Have you ever wondered what the relationship was between your income and your property taxes? The Minnesota Department of Revenue and state legislators wondered, so they created a new research tool called the Voss database, according to Minnesota Budget Bites.
The database helps state leaders better understand and model proposed property tax changes and how they affect people at different income levels. It also shows how the state’s system of property tax refunds and credits – which benefit people from a wide range of incomes – help lower-income homeowners in particular.
The database, named for former state Rep. Gordon Voss, who pushed for the information, can be used to calculate property taxes paid as a percent of income, among other things. One of the great things the database has done already is show how successful property tax credits and refunds are in reducing property tax regressivity.
A recent Department of Revenue analysis of the Voss data shows that without property tax credits and refunds, low-income homeowners (with incomes between $10,000 and $30,000) would pay an average of 7.4 percent of their incomes in property taxes. That’s nearly four times as much as higher-income homeowners.
With tax credits and refunds, low-income homeowners pay 3.7 percent of their incomes in property taxes instead of 7.4 percent.
This new tool highlights just how important property tax credits and refunds like the Market Value Homestead Credit and the Property Tax Refund are. The Voss data shows that these credits work to make our property taxes more progressive.
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