Fiscal Administration 9th ed. Chapter 11, question 6. Mr. and Mrs. Woodward, an

Question

Fiscal Administration 9th ed. Chapter 11, question 6. Mr. and Mrs. Woodward, an elderly couple with no dependents, have taxable source income of $8,000 and Social Security income $26,000. They own property assed at $80,000 (current market value of $190,000) and are subject to a property tax rate of $5/$100 of assed value. They each received an old-age property tax exemption of $500. They are eligible for the state property tax circuit breaker. The relief threshold is 6 percent of total money income, 25 percent of any overload returned by the state in an income tax credit. Maximum relief paid is $ per couple.

Explanation / Answer

The exemption that would be provided is $50000 from the assessed value of the property, wich would lead to a benefit of $50000 x $5/$100 = $2500

So, the maximum relief paid is $3000 per couple.

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