The Property Tax as a Capital Tax: A Room with Three Views

The incidence of the property tax - the critical issue of who ultimately bears the burden of the tax - is still one of the more controversial and more interesting issues in state and local public finance. Three alternative views of the incidence of the tax have appeared in the literature - the tradi...

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Bibliographic Details
Published in:National tax journal 2001-03, Vol.54 (1), p.139-156
Main Author: Zodrow, George R.
Format: Article
Language:English
Subjects:
Analysis
Capital gains tax
Capital stock
Consumers
Consumption
Effects
Equilibrium
Excise taxes
Expenditures
Federal taxes
FORUM ON THE INCIDENCE OF THE PROPERTY TAX
Government services
Housing
Housing prices
Income taxes
Jurisdiction
Local government
Present value
Property taxes
Public finance
Public services
Real property tax
Single tax system
State court decisions
Studies
Tax benefits
Tax incidence
Taxation
Willingness to pay
Zoning
Zoning ordinances
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Summary:The incidence of the property tax - the critical issue of who ultimately bears the burden of the tax - is still one of the more controversial and more interesting issues in state and local public finance. Three alternative views of the incidence of the tax have appeared in the literature - the traditional view which argues that the property tax is fully shifted forward to consumers in the form of higher housing prices, the benefit view which concludes that the property tax is simply a payment for local public services received, and the new view, which argues that it is a distortionary tax on the use of capital within a local jurisdiction. This article reviews the ongoing debate regarding the incidence of the property tax, including both the theoretical underpinnings of the various views and the empirical evidence that might be used to differentiate among them.
ISSN:0028-0283
1944-7477
DOI:10.17310/ntj.2001.1.07