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Which tax is the most important source of tax revenue for local governments?
AThe income tax
BThe property tax
CThe sales tax
DThe fuel tax
Answer & Solution
Correct answer: B. The property tax
1. Local governments raise money from taxes, grants, and service charges.
2. Among local taxes, the property tax, a levy on residential and commercial real estate, is the most important source, about 72 percent of local tax revenue.
3. Sales and income taxes matter more at the state and federal levels than at the local level.
_Source: OpenStax American Government 3e (CC BY 4.0), Ch 3 "American Federalism", section 3.1 The Division of Powers_
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