The Property Tax Incidence Debate and the Mix of State and Local Finance of Local Public Expenditures

Posted: 2 Jul 2008

See all articles by George Zodrow

George Zodrow

Rice University - Department of Economics; Baker Institute for Public Policy; Centre for Business Taxation

Abstract

Many states in the US have in recent years changed the mix of state and local revenue sources used to finance local public expenditures, especially primary and secondary education, with local property taxes being replaced by various sources of state tax revenue. This article examines the desirability of such a tax substitution, focusing on the implications of the long-standing debate between the benefit tax and capital tax views of the incidence of the tax. It also includes a discussion of some recent research that elaborates the capital tax view of the property tax.

Keywords: Property tax incidence, capitalization, capital tax view, new view, benefit tax view, Texas tax reform, margin tax

JEL Classification: H10, H21, H22, H71

Suggested Citation

Zodrow, George R., The Property Tax Incidence Debate and the Mix of State and Local Finance of Local Public Expenditures. CESifo Economic Studies, Vol. 53, Issue 4, pp. 495-521, 2007, Available at SSRN: https://ssrn.com/abstract=1154457 or http://dx.doi.org/ifm019

George R. Zodrow (Contact Author)

Rice University - Department of Economics ( email )

P.O. Box 1892
Houston, TX 77251-1892
United States
713-348-4891 (Phone)

HOME PAGE: http://www.ruf.rice.edu/~zodrow/

Baker Institute for Public Policy ( email )

6100 Main Street, MS-40
Houston, TX 77005
United States
713-348-4981 (Phone)

HOME PAGE: http://bakerinstitute.org

Centre for Business Taxation ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

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