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The Impact of Interstate Mobility on the Effectiveness of Property Tax Reduction in Georgia

Author

Listed:
  • Andrew Feltenstein

    (The Center for State and Local Finance, Georgia State University, USA)

  • Mark Rider

    (The Center for State and Local Finance, Georgia State University, USA)

  • David L. Sjoquist

    (The Center for State and Local Finance, Georgia State University, USA)

  • John V. Winters

    (Iowa State University, USA)

Abstract

This paper develop a computable general equilibrium (CGE) model and a microsimulation model (MSM) to analyze the economic and welfare effects of a Georgia property tax proposal, which would have effectively eliminated school property taxes on homesteaded properties and replaced the lost revenue with a revenue-neutral increase in the state sales tax. Our CGE model, which is a modification of that used in Condon et al. (2015), explores the effects of significantly reducing or eliminating Georgia’s income tax and implementing a revenue-neutral increase in the state sales tax. This paper is set up as follows. We describe the Georgia proposal to reduce property taxes. Following that is a description of the CGE model, and a discussion of the outcomes of that model. The next section presents the MSM and its results. The last section concludes.

Suggested Citation

  • Andrew Feltenstein & Mark Rider & David L. Sjoquist & John V. Winters, 2019. "The Impact of Interstate Mobility on the Effectiveness of Property Tax Reduction in Georgia," Center for State and Local Finance Working Paper Series cslf1907, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:cslfwp:cslf1907
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    File URL: https://cslf.gsu.edu/files/2019/04/cslf1907.pdf
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    References listed on IDEAS

    as
    1. Nicolaus Tideman & Ebere Akobundu & Andrew Johns & Prapaiporn Wutthicharoen, 2002. "The Avoidable Excess Burden of Broad-Based U.S. Taxes," Public Finance Review, , vol. 30(5), pages 416-441, September.
    2. Daniel R. Mullins, 2003. "Popular processes and the transformation of state and local government finance," Chapters, in: David L. Sjoquist (ed.), State and Local Finances under Pressure, chapter 5, Edward Elgar Publishing.
    3. Roxana Julia-Wise & Stephen C. Cooke & RDavid Holland, 2002. "A Computable General Equilibrium Analysis of a Property Tax Limitation Initiative in Idaho," Land Economics, University of Wisconsin Press, vol. 78(2), pages 207-227.
    4. Edward C. Waters & David W. Holland & Bruce A. Weber, 1997. "Economic Impacts of a Property Tax Limitation: A Computable General Equilibrium Analysis of Oregon's Measure 5," Land Economics, University of Wisconsin Press, vol. 73(1), pages 72-89.
    5. Richard M. Bird & Jorge Martinez-Vazquez (ed.), 2014. "Taxation and Development: The Weakest Link?," Books, Edward Elgar Publishing, number 15750.
    6. Rosen, Harvey S & Rosen, Kenneth T, 1980. "Federal Taxes and Homeownership: Evidence from Time Series," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 59-75, February.
    7. Nalitra Thaiprasert & Dagney Faulk & Michael J. Hicks, 2013. "A Regional Computable General Equilibrium Analysis of Property Tax Rate Caps and a Sales Tax Rate Increase in Indiana," Public Finance Review, , vol. 41(4), pages 446-472, July.
    8. Paul S. Armington, 1969. "A Theory of Demand for Products Distinguished by Place of Production (Une théorie de la demande de produits différenciés d'après leur origine) (Una teoría de la demanda de productos distinguiénd," IMF Staff Papers, Palgrave Macmillan, vol. 16(1), pages 159-178, March.
    9. David L. Sjoquist (ed.), 2003. "State and Local Finances under Pressure," Books, Edward Elgar Publishing, number 2752.
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