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The millage rate offset and property tax revenue stability

Keith Ihlanfeldt () and Kevin Willardsen

Regional Science and Urban Economics, 2014, vol. 46, issue C, 167-176

Abstract: One of the alleged virtues of the property tax is that it produces stable revenues regardless of price movements in real estate markets. One explanation for this is that local governments adjust their millage rates to offset changes in their property tax base. Little evidence, however, exists on the strength of this millage rate offset mechanism. We hypothesize that the importance of this mechanism will vary among local governments depending upon the monopoly power that they possess. The results provide strong support for our hypothesis.

Keywords: Property tax revenues; Millage rates; Expenditures (search for similar items in EconPapers)
JEL-codes: H7 H2 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.regsciurbeco.2014.04.004

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