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No relief: Tax prices and property tax burdens

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  • Anderson, Nathan B.

Abstract

In 2001 the state of Minnesota reduced the weights assigned to non-residential property in local property tax bases, which increased residents' price of raising property tax revenue and affords the opportunity to identify the tax price elasticity of local tax revenues and expenditures. Results suggest that a one percent increase in residents' tax prices is associated with a one percent decrease in per-resident property tax revenues as well as a substantial reduction in capital expenditures. The unit price elasticity of property tax revenues suggests that popular tax relief programs that reduce residents' tax prices – homestead exemptions – do not reduce homeowners' tax payments.

Suggested Citation

  • Anderson, Nathan B., 2011. "No relief: Tax prices and property tax burdens," Regional Science and Urban Economics, Elsevier, vol. 41(6), pages 537-549.
  • Handle: RePEc:eee:regeco:v:41:y:2011:i:6:p:537-549
    DOI: 10.1016/j.regsciurbeco.2011.03.014
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    References listed on IDEAS

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    Cited by:

    1. Fitzpatrick, Maria D., 2017. "Pension-spiking, free-riding, and the effects of pension reform on teachers' earnings," Journal of Public Economics, Elsevier, vol. 148(C), pages 57-74.
    2. Anderson, Nathan B., 2012. "Market value assessment and idiosyncratic tax-price risk: Understanding the consequences of alternative definitions of the property tax base," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 545-560.
    3. Johnson, Erik & Walsh, Randall, 2013. "The effect of property taxes on vacation home growth rates: Evidence from Michigan," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 740-750.
    4. James Alm & J. Sebastian Leguizamon, 2018. "The Housing Crisis, Foreclosures, and Local Tax Revenues," Working Papers 1803, Tulane University, Department of Economics.
    5. Jason Giersch, 2014. "Effects of vacation properties on local education budgets," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-9, December.

    More about this item

    Keywords

    Tax price; Property tax;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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