[ NTA logo ]

Are Local Property Taxes Regressive, Progressive, or What?

Wallace E. Oates and William A. Fischel

Abstract:

Local property taxes are commonly regarded as regressive, but the two dominant (and competing) views of the property tax would disagree. Under the capital-tax view, the national element of the tax is a tax on real estate capital, which makes it somewhat inefficient but progressive, given the distribution of ownership of real property. Under the benefit view, the local component of the property tax is not really a tax but a fee for service. We describe evidence that the capital-tax view applies in relatively undeveloped areas, while the benefit view is more relevant in developed urban areas.

Citation

Wallace E. Oates and William A. Fischel (2016), Are Local Property Taxes Regressive, Progressive, or What?, National Tax Journal, 69:2, pp. 415-434

DOI: dx.doi.org/10.17310/ntj.2016.2.06