The Hated Property Tax: Salience, Tax Rates, and Tax Revolts

Abstract

for comments, help with data, and their expertise on property taxation. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Tax aversion in labor supply

“…Field results on tax salience demonstrate that individuals respond less to a tax when the tax is less explicit Finkelstein, 2009;Cabral and Hoxby, 2012;Jones, 2012). Recent laboratory research has supported the claim that individuals respond more to taxes that are more salient (e.g., Sausgruber and Tyran, 2005;Blumkin et al, 2012), and increases in income taxes are often less salient than equivalent decreases in wages.…”

Electoral Competition with Rationally Inattentive Voters

“…What matters instead is the cost of collecting information on instruments targeted at them vs. those targeted at others. Specifically, the equilibrium would become less distorted if the cost of Finally, and almost trivially, the model could be extended to capture the evidence in Cabral and Hoxby (2012), or Bordignon et al (2010). These empirical papers find that policymakers tend to charge lower tax rates when the visibility of taxation is higher, shifting the tax burden on less visible sources of revenue.…”

“…Finkelstein (2009) shows that demand is more elastic to toll increases when customers pay in cash rather than by means of a transponder, and toll increases are more likely to occur during election years in localities where transponders are more diffuse. Cabral and Hoxby (2012) compare the effects of two alternative methods of paying local property tax: directly by homeowners, vs indirectly by the lender servicing the mortgage, who then bills the homeowner through monthly automatic installments, combining all amounts due (for mortgage, insurance and taxes). Households paying indirectly are less likely to know the true tax rate (although they have no systematic bias).…”

Exploring the dark side of tax policy: an analysis of the interactions between fiscal illusion and the shadow economy

“…Buehn and Schneider (2012a). The correlations Mourão (2012) and Cabral and Hoxby (2012). The empirical literature on fiscal illusion is surveyed in Dollery and Worthington (1996).…”