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Tax Incentives for Homeownership and the Provision of Local Public Services

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  • Kelly D. Edmiston
  • Kenneth Spong

Abstract

There is a substantial literature that assesses the distributional impact of the mortgage interest and state and local property tax deductions and the disparate incentives for buying a home across income groups, but virtually no work exists that evaluates the secondary effect on the provision of local public services. In this paper we evaluate the impact that disparate homeowner tax subsidies have on the provision of local public services, specifically, schools. Performing a path analysis, we find that a 100 percent increase in the average homeowner tax subsidy yields a ten percent increase in local public school spending per student.

Suggested Citation

  • Kelly D. Edmiston & Kenneth Spong, 2012. "Tax Incentives for Homeownership and the Provision of Local Public Services," Public Finance Review, , vol. 40(1), pages 116-144, January.
    • Handle: RePEc:sae:pubfin:v:40:y:2012:i:1:p:116-144
    DOI: 10.1177/1091142111422716
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    References listed on IDEAS

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    Cited by:

    1. Kelly Edmiston & Kenneth Spong, 2012. "Promoting Wealth Building through Homeownership," NFI Working Papers 2012-WP-04, Indiana State University, Scott College of Business, Networks Financial Institute.
    2. John M. Foster, 2013. "Voter Ideology, Economic Factors, and State and Local Tax Progressivity," Public Finance Review, , vol. 41(2), pages 177-202, March.
    3. John M. Foster, 2014. "Tax Exporting and the Business Share of Sales Tax Levies," Public Budgeting & Finance, Wiley Blackwell, vol. 34(4), pages 80-99, December.

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