Center for Policy Research
Property Tax Web Series
Fiscal Incidence of the Property Tax
Keith Ihlanfeldt, Luke P. Rodgers
April 2022
Related:
Abstract
Extensive research focuses on the distributional burden of taxation, yet less is known about net fiscal incidence, or the difference between benefits received and taxes paid. We use data from Florida spanning a decade (2010-2019) to empirically revisit the topic of fiscal incidence as it applies to property taxation.
We first estimate demand equations in order to calculate the Lindahl tax share, or price the median voter would be willing to pay for public goods. Our measure of fiscal incidence is the difference between the Lindahl tax share and the actual tax share.
With the exception of police expenditures, fiscal incidence tends to increase with income, a pattern we attribute to public goods being valued more by high-income residents who pay a modestly progressive property tax. Areas with more Black and Hispanic residents have higher levels of fiscal incidence.
This paper was presented by Luke P. Rodgers on April 15, 2022 as part of the 2021-2022 Syracuse Webinar Series on Property Tax Administration and Design.
This Syracuse-Chicago Webinar Series on Property Tax Administration and Design aims to gather insight and scholarship through domestic and international comparative studies with common threads to help reform and improve property tax administration and design in the U.S. and other countries facing similar problems.
For questions about the webinars, please contact Zia Jackson. For questions about this paper, please contact the author or authors.