Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
983724 | Regional Science and Urban Economics | 2012 | 16 Pages |
I develop a framework, based on tax price, which measures the distributional consequences of any alternative property tax base definition. Using administrative data, I show that defining tax base as market value produces large amounts of idiosyncratic tax-price risk. I show that an assessment limit can reduce the tax-price risk generated by the market value definition and that the benefits of the assessment limit vary over time and accrue to a majority of taxpayers. In addition, I argue that the tax-price framework is appropriate for estimating behavioral responses to alternative tax base definitions.
► Framework evaluates distributional consequences of alternative tax base definitions ► Market value assessment produces idiosyncratic tax-price risk ► Benefits of an assessment limit vary over time ► Majority of taxpayers can benefit from assessment limit ► Assessment limit can reduce tax-payment risk