Fiscal Incidence of the Property Tax

Keith Ihlanfeldt and Luke P. Rodgers

Public Finance Review, 2025, vol. 53, issue 3, 296-339

Abstract: We use data from Florida spanning a decade (2010–2019) to empirically revisit the topic of fiscal incidence, the difference between benefits received and taxes paid, as it applies to property taxation. We first estimate demand equations in order to calculate the Lindahl tax share, or price the median voter would be willing to pay for public goods. Our measure of fiscal incidence is the difference between the Lindahl tax share and the actual tax share. With the exception of police and fire expenditures, benefits tend to outweigh costs for those with higher incomes, a pattern we attribute to public goods being valued more by high-income residents who pay a modestly progressive property tax. Controlling for income, Hispanic and black residents have higher levels of fiscal incidence. We explore how policy reforms, including equitable property assessment, affects fiscal incidence.

Keywords: property tax; tax incidence; public goods; net fiscal incidence; H2; H22; H4; H7 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:53:y:2025:i:3:p:296-339

DOI: 10.1177/10911421241275214

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