Market Value Assessment and Idiosyncratic Tax-Price Risk: Understanding the Consequences of Alternative Definitions of the Property Tax Base
journal contributionposted on 2013-11-26, 00:00 authored by Nathan B. Anderson
I develop a framework, based on tax price, that 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.
Publisher StatementNOTICE: This is the author’s version of a work that was accepted for publication in Regional Science and Urban Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Regional Science and Urban Economics, Vol 42, Issue 4, (2012) DOI: 10.1016/j.regsciurbeco.2012.01.002