Center for Policy Research
Property Tax Web Series
The Geography of the U.S. Property Tax
Francesco Ruggieri
August 2024
Related:
Abstract for The Geography of the U.S. Property Tax
Ruggieri constructs a novel, granular georeferenced dataset on the universe of local governments in the United States and their property tax rates from the early 2000s to 2022. Using this dataset, Ruggieri presents new descriptive insights on the geography of the property tax. First, property tax rates exhibit substantial variation within states, surpassing that of any other local tax. Second, rates are higher in locations where a greater number of jurisdictions overlap and thus share tax base. Third, rates are higher in areas with larger dispersion in property values and greater racial and ethnic heterogeneity. Fourth, new local taxing jurisdictions are more likely to be formed in locations where the distribution of income is more even and dispersion in housing values is lower.
Abstract for A Spatial Theory of Overlapping Local Governments
Local governments in the United States are vertically differentiated. A typical location is served by multiple overlapping jurisdictions that share property tax base and specialize in the provision of one or more local public goods. This paper evaluates the implications of such vertical differentiation for the equilibrium levels of government spending, property tax rates, and household welfare. Ruggieri proposes a spatial theory of overlapping jurisdictions in which residents collectively determine the local mix of expenditures and taxes. Because fiscal policy capitalizes into housing prices and all jurisdictions draw revenue from housing, the cost of raising expenditures in a location is implicitly shared with other coexisting jurisdictions. In equilibrium, this induces higher levels of government spending, higher property tax rates, and lower household welfare compared to scenarios in which jurisdictions are vertically coterminous or only horizontally differentiated.
These papers were presented by Francesco Ruggieri (University of Chicago) on August 30, 2024 as part of the 2024-2025 Syracuse-Chicago Webinar Series on Property Tax Administration and Design. Troup Howard (University of Utah) was the discussant for this presentation.
This Syracuse-Chicago Webinar Series on Property Tax Administration and Design aims to gather insight and scholarship through domestic and international comparative studies with common threads to help reform and improve property tax administration and design in the U.S. and other countries facing similar problems.
For questions about the webinars, please contact Alyssa Kirk. For questions about this paper, please contact the author or authors.