Fiscal Illusion from Property Reassessment? an Empirical Test of the Residual View
نویسندگان
چکیده
The property tax rate, according to the residual view, is simply the ratio of levies over total assessed values, so that growth in property values is irrelevant to the revenue raised. Critics of this view claim instead that fi scal illusion allows policymakers to take advantage of increased assessed values to raise additional revenue by not fully reducing the tax rate. Using 2000–2008 data from Virginia cities and counties, this paper tests the competing claims by studying a natural experiment in the timing of mass reappraisals. Our fi ndings provide partial support for the fi scal illusion critique of the residual view.
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