Federal Deductibility and Local Property Tax Rates / Douglas Holtz-Eakin, Harvey S. Rosen.

Format:

Book

Author/Creator:

Holtz-Eakin, Douglas.

Contributor:

National Bureau of Economic Research.

Rosen, Harvey S.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2427.

NBER working paper series no. w2427

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1987.

Summary:

In current discussions of tax reform in the United States, there is considerable controversy concerning the effects of allowing individuals to deduct state and local taxes when calculating their federal income tax liability. 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 of 82 communities would fall by 0.00715 ($7.15 per thousand dollars of assessed property), or 21.1 percent of the mean tax rate.

Notes:

Print version record

November 1987.