Center for Policy Research
Property Tax Web Series
Implicit Land Taxes and Their Effect on the Real Economy
Daniel Murphy and Nathan Seegert
February 2024
Related:
Abstract
We show that land taxes are associated with higher density, neighborhood diversity, business formation, and other indicators of economic performance. To demonstrate as much, we first estimate implicit land taxes (or subsidies) for over 2,000 counties in the U.S. These implicit land taxes arise due to differences between tax assessors and market valuations of land and, therefore, are likely idiosyncratic. We find substantial dispersion in these implicit land taxes across U.S. counties and within metropolitan areas, consistent with them being idiosyncratic. Finally, we develop a model of land taxes and endogenous population to rationalize our results.
This paper was presented by Nathan Seegert (University of Utah) on February 2, 2024 as part of the 2023-2024 Syracuse-Chicago Webinar Series on Property Tax Administration and Design. John Anderson (University of Nebraska-Lincoln) was the discussant for this presentation. Anderson comments on Seegert's "Implicit Land Taxes and Their Effect on the Real Economy."
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.