Property Tax Circuit Breakers Reconsidered: Continuing Issues Surrounding a Popular Program

A bstract . Property tax circuit-breaker programs—provision for tax relief for selected groups of the population believed to be adversely affected by rising state and local taxation on residences—exist in 30 states and the District of Columbia. They are still in controversy. The best available evidence on some of the basic issues being debated is considered in an effort to evaluate their policy implications. The device is found to be desirable and, if the residential property tax were regressive in certain respects, a move in the direction of tax equity. "Current income" is found more useful in determining eligibility; net worth tests would be difficult to apply. Relief for tax burdens above an acceptable share of household income is preferable to one based on a sliding scale formula. However, the tendency dearly is to liberalize benefits. This creates the danger of eroding the tax base.