TY - JOUR
T1 - Federal deductibility and local property tax rates
AU - Holtz-Eakin, Douglas
AU - Rosen, Harvey
N1 - Funding Information:
‘This research is part of the NBER Project in State and Local Government Finance. We thank Ralph Braid, Amy Ellen Schwartz, Ronnie Lowenstein, seminar participants at SUNY-Stony Brook and the University of Maryland, and a referee for valuable comments. Dan Edelstein provided valuable assistancew ith the computations. We are grateful for a grant from the Olin Foundation to Princeton University.
PY - 1990/5
Y1 - 1990/5
N2 - Recent econometric work has suggested that federal deductibility of state and local taxes has raised the proportion of these taxes-especially property taxes-in local budgets. This paper lends additional support to these earlier findings by showing that one channel through which deductibility leads to higher local property tax revenues is by increasing the rate of local property taxation. Specifically, we find that if deductibility were eliminated, the mean property tax rate in our sample would fall by 0.00715 ($7.15 per $1000 of assessed property), or 21.1% of the mean tax rate.
AB - Recent econometric work has suggested that federal deductibility of state and local taxes has raised the proportion of these taxes-especially property taxes-in local budgets. This paper lends additional support to these earlier findings by showing that one channel through which deductibility leads to higher local property tax revenues is by increasing the rate of local property taxation. Specifically, we find that if deductibility were eliminated, the mean property tax rate in our sample would fall by 0.00715 ($7.15 per $1000 of assessed property), or 21.1% of the mean tax rate.
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U2 - 10.1016/0094-1190(90)90001-4
DO - 10.1016/0094-1190(90)90001-4
M3 - Article
AN - SCOPUS:38249019736
SN - 0094-1190
VL - 27
SP - 269
EP - 284
JO - Journal of Urban Economics
JF - Journal of Urban Economics
IS - 3
ER -