The Operation of the Graded Tax Law in Pittsburgh

Abstract

The system of assessing real estate for taxation purposes in the city of Pittsburgh does not differ materially from the assessment system in force in other large cities throughout the country. Land and buildings are assessed separately, as in New York, Boston, Cleveland, Detroit, and other large cities. The graded tax plan does not involve any discrimination in our treatment of land and buildings, in so far as appraising the value for taxation purposes is concerned. It is entirely a matter of fixing separate tax rates. The Department of Assessors furnishes the total assessed valuation of land and the total assessed valuation of buildings to the City Council. After the amount of the city budget is known, the City Council determines the tax rates for city purposes. The Council fixes two separate rates, one rate to apply to land and the other rate to apply to buildings. The building tax rate, according to the law, must be one-half of the land tax rate. Pittsburgh, therefore, does not really have a tax on real estate as that term is generally understood in speaking of taxation in American cities. In place of a general real estate tax, there is a land tax and a building tax, and while it is possible to arrive at the average real estate tax for the city as a whole we do not speak in terms of a real estate tax. The average would, of course, differ in almost every individual case, depending entirely upon the relative value of the land and of the building in each individual assessment. But, there is absolute uniformity in the taxation of all land and in that of all buildings. Pittsburgh levies no tax whatever on personal property, machinery, and so forth, standing alone, among the large cities of the United States, in this r spect.