In every state I have lived in, the first factor of that "property tax formula" is always "Assessed Value" of said property, and then the formula continues from there based on a slew of criteria (property type, exemptions, etc.).
So you are correct that "Property taxes do not have to go up because the assessment goes up." but it is misleading since property tax is generally going to go increase if assessment increases and all other factors are held equal.
I have seen tax rates drop from 1.25% to 1% and the opposite also happens when the tax collections come up short.
I can give an example. I used to have land in NJ a few years ago, and the total property tax went up year after year. If I recall, the tax rate went from ~1.5% to slightly above 2%, and the assessment barely went up. The property tax went up due to government expenses coming in higher than expected due to all the debt NJ is in that was not counted as debt (underfunded DB pensions). In fact, I lost money on that land because it was worth less since prospective buyers know the property tax will continue to rise, so they have to budget for that.
On the other hand, I had land in FL at the same time, which has appreciated a lot and was assessed for more. But the total property tax paid stayed more or less the same, since the tax rate came down since the government’s expenditures did not move as much, and/or were offset by new payers.
The property tax formulas have more to do with what proportion of the government’s expenses is each land owner liable for, but the total tax collected does not need to rise in step with total land value increase.
The government always needs more money.
Why would your property taxes not continue to go up endlessly?
IIUC, you're arguing that we should expect that ^^^ outcome, because of the political/economic dynamics you mentioned earlier.
My understanding is that, except in towns/cities undergoing gentrification, U.S. municipal property taxes are pretty constant (modulo inflation).
So it sounds like the outcome predicted by that theory probably isn't happening. Wouldn't this cast doubt on the theory?
Yes, except for places experiencing increasing real property values, real property taxes aren’t increasing.
But the discussion was about places with sustained real property value increase, so that generality is irrelevant.
The scare scenario is still wrong, but for different reasons.
Unless you're referencing the California instances in which Prop 13 protects homeowners from increases of more than 2%, I'm not sure what you mean. Nationwide property taxes increase over 5% YoY, while general inflation was far less [0]
[0] https://www.marketwatch.com/story/homeowners-are-facing-the-...
[1] https://www.statista.com/statistics/244983/projected-inflati...
In fact the evidence is that property taxes don’t go up endlessly they are actually highly stable when adjusted for inflation. Further many states don’t have property tax, or expressly cap them.
Finally everyone always needs more money, individual and companies included. Why should government be any different. Governments are just human organizations like any other. They just have a different role and responsibility.
I do expect them to go up endlessly, but I expect for everything else to also go up endlessly (in nominal terms).
In the long run it probably will though, since higher land values will probably cause increases in wages and other costs. But it does not have to be proportionally as much as the land value increase.