The Response of Delinquent Taxpayers to More Aggressive Collection

Joshua J. Miller and Silda Nikaj

National Tax Journal, 2016, vol. 69, issue 1, 77-102

Abstract: To reduce uncollected property tax delinquency, local governments often conduct tax lien sales. Tax lien sales reduce tax delinquency through two effects: the financial effect, or the sale of tax liabilities to private investors, and the behavioral response, or the early payment of delinquency by taxpayers who wish to avoid the sale. Using a policy innovation from Ohio, we estimate that tax lien sales reduce uncollected property tax balances by 5.6 percent through the behavioral response. However, we find evidence that tax lien sales fail to produce a behavioral response under adverse housing market conditions.

Date: 2016
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