The Color of Law A Forgotten History of How Our Government Segregated America by Richard Rothstein (z-lib.org).epub

Each one sets its property tax rate by dividing its total budgeted expenditures
—how much it expects to spend in the coming year—by the total assessed
value of all properties in its jurisdiction.
Assessed values do not have to be the same as market values, but a fair
and nondiscriminatory system requires that all properties be assessed at the
same percentage of their market values. Whether a tax assessor says that
assessed values should be 20 percent of market values, or 200 percent of
market values, homeowners pay the same dollar amount of tax after the
calculations are completed. If the city’s total assessed value is high, dividing
it into the budget will yield a low rate. If the city’s total assessed value is
low, dividing it into the same budget will yield a high rate. A low rate
multiplied by a high value will yield the same tax revenue as a high rate
multiplied by a low value.
But an assessor can undermine tax fairness by using different percentages
of market value in different communities. By doing this in the mid-twentieth
century, city and county governments extracted excessive taxes from African
Americans. These governments did so by overassessing properties in black
neighborhoods and underassessing them in white ones. Although assessors
may have had a bias that led them to assess houses of lower-income families
of any race at a higher percentage of their market values than houses of
affluent families of any race, this alone cannot explain the differences. A
1979 study of Chicago assessments, for example, included a statistical
analysis demonstrating that the chances of these differences being
attributable to social-class bias alone were less than one in a hundred.
Homeowners have no way of knowing about the underassessments in
other neighborhoods. African Americans felt that their property taxes were
excessive but typically could not identify the cause. This made racial
discrimination by assessors especially pernicious.
Taxpayers have a natural tendency to be pleased when the assessor gives
a high value to their property. It makes them feel wealthier, increasing their
equity on paper. But what an assessor says about property value can’t affect
the potential sale price of a home; higher assessed values only mean that tax
payments will be higher if other properties are not overassessed in the same
way. Whether some neighborhoods are overassessed and others
underassessed is difficult to study. It requires painstaking property-byproperty
comparisons of assessed value and market value. Since it is