Oregon 30-Hour Real Estate Law Practice Test

Which type of taxes are a reliable source of income for the state due to their consistent value?

1. Income tax

2. Capital gains tax

3. Sales tax

4. Property tax

The correct answer is: Property tax

Property tax is considered a reliable source of income for the state due to its consistent value and stability over time. Unlike income tax, which can fluctuate based on economic conditions and individual earnings, property tax is based on the assessed value of real estate, which tends to appreciate steadily over long periods. This predictable nature allows states and local governments to plan their budgets and fund services without experiencing drastic changes from year to year. Additionally, property taxes are often levied at a fixed rate against the established value of the property, making them a stable source of revenue that does not rely on market volatility or consumer spending patterns. This consistency is particularly valuable in times of economic downturn, when other forms of taxation, such as sales or income tax, may see significant fluctuations. As a result, property tax serves as a foundation for funding essential public services such as education, public safety, and infrastructure, reinforcing its role as a dependable source of revenue for the state.