The Incidence of Property Taxes on Agricultural Land

Abstract

Property tax systems have undergone rapid change in almost every state during the past few years. Consequently, their distributional impact merits investigation. The incidence of the property tax is at the heart of the distributional question. It is generally felt that land owners bear the full burden of property taxes and that changes in it are capitalized into property values. Usually it is assumed that property taxes are not shifted forward to the consumer, but there has been little empirical verification of this notion. This paper will develop a simple model of the land market to test several alternative hypotheses concerning the incidence of property taxes on agricultural land in the United States.

The Impact of Property Tax Equalization on Rural Property in Oklahoma

“…For a discussion of why such capitalization occurs, see[9]. In a previous paper the author argued that global effects of property taxes were not always capitalized[2]. Within the context of this paper all changes in property taxes may be considered within a local or partial equilibrium framework.…”