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Land, Power, and Property Tax Limitation

The Politics of Land

ISBN: 978-1-78756-428-2, eISBN: 978-1-78756-427-5

ISSN: 0895-9935

Publication date: 13 March 2019

Abstract

The local property tax is the oldest tax in the United States, as well as being the only substantial tax on landed wealth, a major part of the housing expense of most American families, and the most important revenue source for local governments. It is also increasingly limited by state law. This chapter presents a synthetic review of the literature on property tax limitation laws. Property taxation is a crucial resource for local governments because it is primarily a tax on real estate, and land is the least mobile tax base. A tax on the market value of real estate may have the effect of transmitting real estate price shocks to individual land users. Property tax limitation laws provide some homeowners with social protection from such market-induced economic shocks, but they do so at the price of a substantial reduction in state capacity. A meta-regression analysis of published studies finds that property tax levy limitations, on average, reduce local government budgets by as much as 5%. The potential implications for provision of other public goods, including social protection for other groups, are discussed.

Keywords

Acknowledgements

Acknowledgments

I would like to thank Abigail Andrews, Erica Bender, Andrea Campbell, Michael Hout, Richard Lachmann, Kevin Lewis, Akos Rona-Tas, and audiences at the American Sociological Association and the UC San Diego Workshop on Comparative Historical Sociology for comments on early versions of this research. The research for this chapter was supported by the UCLA Institute for Research on Labor and Employment.

Citation

Martin, I.W. (2019), "Land, Power, and Property Tax Limitation", The Politics of Land (Research in Political Sociology, Vol. 26), Emerald Publishing Limited, Bingley, pp. 39-65. https://doi.org/10.1108/S0895-993520190000026007

Publisher

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Emerald Publishing Limited

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