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Reducing Property Taxes on Homeowners

Author

Listed:
  • Andrew Feltenstein
  • Mark Rider
  • David L. Sjoquist
  • John V. Winters

Abstract

We consider a proposal that reduces by half the taxes on homesteaded properties and replaces the lost revenue by increasing the base and rate of the state sales tax. We develop a computable general equilibrium (CGE) model and a microsimulation model (MSM) to analyze the economic and welfare effects of such a proposal if adopted in Georgia. The results from the CGE model suggest that the proposed reforms have a substantial negative effect in percentage terms on Georgia’s economy. The MSM suggests that such a policy has no effect on the distribution of consumption by income class but increases the percentage of owner-occupied housing relative to rental housing by 20 percent in the aggregate.

Suggested Citation

  • Andrew Feltenstein & Mark Rider & David L. Sjoquist & John V. Winters, 2017. "Reducing Property Taxes on Homeowners," Public Finance Review, , vol. 45(4), pages 484-510, July.
    • Handle: RePEc:sae:pubfin:v:45:y:2017:i:4:p:484-510
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