Federal deductibility and local property tax rates

Douglas Holtz-Eakin, Harvey Rosen

Research output: Contribution to journalArticlepeer-review

24 Scopus citations


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.

Original languageEnglish (US)
Pages (from-to)269-284
Number of pages16
JournalJournal of Urban Economics
Issue number3
StatePublished - May 1990

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Urban Studies


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