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Market value assessment and idiosyncratic tax-price risk: Understanding the consequences of alternative definitions of the property tax base

Nathan Anderson

Regional Science and Urban Economics, 2012, vol. 42, issue 4, 545-560

Abstract: 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.

Keywords: Property tax; Tax price; Property tax base; Assessment limit; Tax-price risk (search for similar items in EconPapers)
Date: 2012
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Handle: RePEc:eee:regeco:v:42:y:2012:i:4:p:545-560