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Fiscal Incidence of the Property Tax

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  • Keith Ihlanfeldt
  • Luke P. Rodgers

Abstract

We use data from Florida spanning a decade (2010–2019) to empirically revisit the topic of fiscal incidence, the difference between benefits received and taxes paid, as it applies to property taxation. We first estimate demand equations in order to calculate the Lindahl tax share, or price the median voter would be willing to pay for public goods. Our measure of fiscal incidence is the difference between the Lindahl tax share and the actual tax share. With the exception of police and fire expenditures, benefits tend to outweigh costs for those with higher incomes, a pattern we attribute to public goods being valued more by high-income residents who pay a modestly progressive property tax. Controlling for income, Hispanic and black residents have higher levels of fiscal incidence. We explore how policy reforms, including equitable property assessment, affects fiscal incidence.

Suggested Citation

  • Keith Ihlanfeldt & Luke P. Rodgers, 2025. "Fiscal Incidence of the Property Tax," Public Finance Review, , vol. 53(3), pages 296-339, May.
    • Handle: RePEc:sae:pubfin:v:53:y:2025:i:3:p:296-339
    DOI: 10.1177/10911421241275214
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    References listed on IDEAS

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    1. Anwar M. Chaudry-Shah, 1989. "A Capitalization Approach to Fiscal Incidence at the Local Level," Land Economics, University of Wisconsin Press, vol. 65(4), pages 359-375.
    2. Mieszkowski, Peter, 1972. "The property tax: An excise tax or a profits tax?," Journal of Public Economics, Elsevier, vol. 1(1), pages 73-96, April.
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