Conceptually, the ad valorem real property tax should be directly proportional to the value of the real property being taxed. However, according to the 1988 Agricultural Economics and Land Ownership Survey (AELOS), taxes paid per $100 of value of farm land and buildings declined with increases in the value of holdings. For example, landholdings valued at less than $70,000 were taxed at an average rate of $1.45 per $100 of value, while holdings of $5 million or more were taxed at 47 cents per $100. This report examines possible causes for the regressive tax rates on farm property, including State variations in tax rates, assessment bias, and landholder characteristics.