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Property tax autonomy and tax mimicking in major metropolitan areas in Poland

Agnieszka Malkowska (), Agnieszka Telega, Michał Głuszak () and Bartlomiej Marona
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Agnieszka Malkowska: Cracow University of Economics, Poland
Agnieszka Telega: Cracow University of Economics, Poland
Bartlomiej Marona: Cracow University of Economics, Poland

No 69/2017, Working Papers from Institute of Economic Research

Abstract: Research background: Real estate and urban economics literature is abundant in studies discussing various types of property taxes and their characteristics. Growing area of research focused on tax equity, tax competition, and tax mimicking. Recently, due to substantial developments in spatial and regional economics more attention was drawn to spatial effects. Empirical results are focused on spatial interaction and diffusion effects, hierarchies of place and spatial spillovers. Property tax system in Poland differs from those utilized in the majority of developed countries. As a consequence, property tax policy at local government level (including tax competition and tax mimicking effects) in Poland can differ substantially from those found in previous research in US and other European countries. There are few studies addressing the problem of tax competition and tax mimicking in Poland from empirical perspective. Purpose of the article: In the article we explore spatial dependences in property taxation. We identify clustering or dispersion of high and low values of the tax rates within major metropolitan areas in Poland. The effects can indicate presence of tax mimicking among municipalities in given metropolitan areas. Methodology/methods: We analyze the panel data from 304 municipalities in 10 metropolitan areas in Poland from year 2007 to 2016. The data covers four property tax rates: (1) on residential buildings (2) on buildings used for business purpose (3) on land used for business purpose (4) on land for other uses. To explore spatial distribution of rates we used global and local spatial autocorrelation indicators (Moran’s I statistic and LISA). Findings: The results suggest the presence of spatial correlation within metropolitan areas. We also found significant differences between metropolitan areas. The results of the study fill the gap in empirical research concerning property tax mimicking in Poland.

Keywords: tax autonomy; property taxation; tax mimicking; spatial interdependence; Poland (search for similar items in EconPapers)
JEL-codes: H2 H71 R5 (search for similar items in EconPapers)
Date: 2017-05, Revised 2017-05
New Economics Papers: this item is included in nep-dcm, nep-pbe, nep-pub and nep-ure
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